Poll predicts £50bn BoE injection into UK economy in November
The Bank of England will probably hold off on pumping more money into the UK economy next month but will inject another £50bn(€57.46bn) in November as a weakening outlook forces it to act, a poll predicted yesterday.
The poll of 60 economists, gave a median 40pc chance that the bank would resume its quantitative easing (QE) programme when it meets on October 6 but a 75pc chance that it would do so at a later date.
"We continue to expect the MPC will introduce QE in large scale soon, probably in October or November," said Michael Saunders at Citi.
Minutes from September's Monetary Policy Committee (MPC) meeting showed only Adam Posen voted for more stimulus, although most of his eight colleagues believed the stresses of the past month had strengthened the case for an "immediate" resumption of bond purchases.
MPC member Ben Broadbent said on Monday the economy would not need to weaken much further for the bank to start a second round of QE and his colleague David Miles said yesterday he was closer to voting to resume the programme.
The poll predicted the bank would spend another £50bn on top of the £200bn it has spent so far on mainly government bonds, using newly created money, to kick-start the economy and drive down borrowing costs.
The UK economy grew just 0.2pc in the second quarter, having flatlined in the previous six months. Economists expect growth of 0.3pc for the current and subsequent quarters. The BoE cut its 2011 and 2012 full-year growth forecasts to 1.4 and 2pc respectively in its August Inflation Report -- numbers it will update in November.
Britain has implemented tough austerity measures to reduce its large budget deficit and ruled out any significant fiscal stimulus as a means of boosting the economy. (Reuters)