Carney boosts pound by saying no to more QE
Saturday 28 September 2013
Bank of England Governor Mark Carney lifted the pound yesterday with his most explicit rejection yet of more money-printing to aid the recovery.
The pound ticked up to $1.6084 as the Canadian, pictured, said the recent signs of life in the economy had put the Bank’s £375bn quantitative easing programme on the back burner. He added:“My personal view is, given the recovery has strengthened and broadened, I don’t see a case for quantitative easing and I have not supported it.”
Three members of the Monetary Policy Committee were voting until June for an extra £25bn in QE. But this month rate-setters were unanimous the economy was in no need of further stimulus, and the MPC is now signed up to forward guidance, under which it will not consider interest rate rises until unemployment falls to 7 per cent. The economy grew 0.7 per cent between April and June and is on course for even stronger growth this quarter.
Neil Mellor from BNY Mellon said: “Carney is more of a pragmatist than the out-and- out dove the market has painted him as... in Canada he introduced forward guidance and just over a year later he was raising interest rates.”
The Treasury has meanwhile asked the Bank to play a bigger role in assessing the impact of its Help to Buy programme on the housing market.
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