MPC's Weale: No need for more QE - yet

The immediate future of the UK economy will not be dependant on a further round of quantitative easing (QE), a member of the Bank of England's rate setting body said yesterday.

However, Martin Weale, one of nine members of the Bank's Monetary Policy Committee, said it had the option of using the stimulus measure again, should the need arise.

Earlier this month, Mr Weale voted to keep the UK base rate at a historic low of 0.5%, having previously voted for a rise.

To date, the UK has pumped some £200bn into the economy in a single round of QE - the process of injecting money directly into the economy.

One member of the MPC, Adam Posen, has consistently voted for an extra £50bn of QE.

But in a speech to the Doncaster Chamber of Commerce on Thursday, Weale said he did not believe more action was needed.

"I do not think our August forecast or the more recent market movements since then as yet make a case for such a policy," he said.

"Although the economy is weaker than we would like, business surveys do not suggest the picture is, at present, like that of the summer of 2008."

However, he later added: "There is undoubtedly scope for further asset purchases to trigger further reductions in yields on government debt should the need arise."

Until August's MPC meeting, Mr Weale had voted for an increase in the Bank Rate to 0.75% in the previous seven meetings.

However, Weale said he had changed his mind because of the weaker economic outlook, noting the slowdown in the US and the problems in the eurozone area

Consumer Prices Index inflation is currently at 4.4%, well above the target rate of 2%.