• “More support for higher QE points to an increase next month, but other measures are needed to support business,” says David Kern.
Commenting on the Monetary Policy Committee (MPC) minutes for June, published today by the Bank of England, David Kern, Chief Economist at the British Chambers of Commerce (BCC) said:“We were surprised by the extra support for more QE, with four members including the Governor voting for an immediate increase. It now seems likely that the MPC will increase the programme by £50 billion at its next meeting. Given the serious crisis in the eurozone, and the risks this poses to the UK financial system, more QE would be understandable. But we know that recent injections have not made much of a difference to businesses on the ground, and the benefit to the economy has been limited.
“The MPC must do more to boost lending to businesses by purchasing private sector assets, including securitised SME loans, rather than restricting itself to buying only gilts. The government also has a part to play and must ensure that the measures announced last week to improve liquidity and business lending are implemented effectively and without delay.”