UK Central Bank has enough ‘firepower’

LONDON - Reuters

People walk through a quiet street market in London, Britain. A Bank of England policymaker believes they have more space to support the economy. EPA photo

Britain’s central bank still has the firepower to boost a sluggish economy and has scope for further stimulation with more asset purchases, Bank of England policymaker David Miles said yesterday.

“If growth does stay very weak and inflation stays low and close to the target level there is more that we can do, we have not run out of ammunition,” he told Sky News.

“There is the scope for more quantitative easing ... it remains a powerful weapon.”

Miles said the central bank was running the most expansionary monetary policy in its history and the positive effects would become evident. “I expect we will see growth pick up from the very low levels we have seen over the last year or so,” he said.

Easing policy

Since the departure of policymaker Adam Posen earlier this year, Miles has been the strongest supporter of quantitative easing asset purchases on the Bank of England’s Monetary Policy Committee (MPC).

It will become clear when the MPC’s latest minutes are published Nov. 21 whether Miles backed the committee’s decision earlier this month to cease further asset purchases beyond the central bank’s current total of 375 billion pounds.