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Bank Of England’s Posen: You Have To Choose Either Money Printing Or A Lost Decade Of Growth
200 billion pounds of quantitative easing (QE) wasn’t enough according to the Bank of England’s Adam Posen.
Speaking to the Hull and Humber Chamber of Commerce, Industry, and Shipping, he argued for a second round of QE, warning that should England refuse then a lost decade of growth was ahead.
Print or die:
Telegraph:
“Absent further monetary stimulus, I would expect UK inflation to fall well short of the target in 2012 and 2013, perhaps reinforcing a persistently low-growth outcome as in Japan in the 1990s.”
It is the first time an MPC member has publicly called for more QE and raises the prospect of a three-way split at next month’s interest rate vote. In an interview with the Nottingham Post yesterday, Andrew Sentance, the lone MPC member to have voted for a rate rise at the past four meetings, said: “There is no need [to restart QE]. I think we should be preparing the ground for gradually increasing interest rates.”
Given the massive protests against austerity measures hitting other parts of Europe right now, supporting any kind of stimulus become at least slightly more appealing to policy makers right now. Nobody wants a cement mixer in their face.
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