![]() “Regarding the Bank Rate and the stock of asset purchases, the Committee voted unanimously in favour of the proposition that base rates and Quantitative Easing (QE) should be kept on hold. The Governor had "invited the Committee to vote on the propositions that Bank Rate should be maintained at 0.5% and the Bank of England should maintain the stock of asset purchases at £375 billion". The MPC were united as Carney called time on QE. “And so the period of Quantitative Easing draws to a close, as an experiment in monetary policy. David Miles [MPC member] and Paul Tucker [Deputy Governor Responsible for Financial Stability] fell into line with the “new reality”. The pair had been the two QE stalwarts who had “stuck it out” with Mervyn King right to the end of the line. With the economy recovering and inflation rising, it was time to say goodbye to QE. A farewell stimulated by the arrival of the new Governor. “Earlier this week, Paul Fisher, Head of Markets at the Bank of England, gave evidence to the Treasury Select Committee. Fisher suggested any unwinding of monetary stimulus was likely to be years in the future. No need to worry about the unwinding of QE, the gilts will be held to redemption and like old soldiers will fade away, into the ghostly shadows of public sector accounting. “Paul Fisher also confirmed that market expectations of rate rises was much sooner than the Bank might expect. The MPC would like markets to believe base rates will not rise until 2016. We shall await the notes on forward guidance in August for more information on this. For the moment, rejoice, QE is dead, it ran out of funding and intellectual currency a long time ago.” - See more at: http://www.gmchamber.co.uk/stories/committee-united-on-quantitative-easing#sthash.Z3vxUJnC.dpuf
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