BOE Fisher: More QE Only If Threat Of Deep Recession

LONDON (MNI) – Further quantitative easing would not be justified
unless there is a threat of the UK falling back into a deep recession,
Bank of England Executive Director Markets Paul Fisher says in a Dow
Jones interview.

The Monetary Policy Committee voted for no change in policy at its
May meeting but the May Inflation Report projections showed scope for
more stimulus, with inflation heading clearly below the 2% target.
Fisher, however, makes clear that unless the economy takes another turn
for the worse he is unlikely to back more stimulus.

Fisher said that from his perspective the key reason for
relaunching QE in October last year was the risks the UK could fall back
into “deep recession.”

“If I saw that risk re-emerging, then personally I would want to
think again about restarting (QE),” Fisher says.

“If there is not that serious possibility of deflation down the
road, then I think there is less impetus behind doing more asset
purchases,” he adds.

He warns the MPC could lose credibility if inflation sticks above
its 2.0% target year-after-year. He also said continued sterling
appreciation would make policymakers uncomfortable about the chances of
economic rebalancing.

–London newsroom: +44 20 7862 7491; email: ukeditorial@marketnews.com

[TOPICS: M$B$$$,M$$BE$]