MPC right not to increase QE, says BCC
â€œWe support the prudent decision to maintain QE at Â£375bn, and hold interest rates at 0.5%. Following the return to positive GDP growth in Q1, pressures for an increase in QE have eased. We still firmly believe that adding to QE would only provide marginal benefits for the economy, while increasing the risks of higher inflation and bubbles in the future.
â€œFollowing the changes in the MPCâ€™s remit announced in the Budget, it is worrying that the demand for more QE could be part of a wider policy shift where higher inflation and a weaker pound are tolerable. Instead, incoming Governor Mark Carney should make better use of the existing QE programme, and use measures other than QE alone to support a revival of business lending.
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