Commenting on today’s decision from the Bank of England to maintain the Bank Rate at 0.5% and the size of the Asset Purchase Programme at £375 billion, KPMG Chief Economist, Andrew Smith, said:
“It comes as no surprise that the Monetary Policy Committee has decided to do nothing. After all, it was only in July that the Bank embarked on another round of QE which it is still in the process of executing.
“However, the Committee is unlikely to remain inactive for long. Last month inflation resumed its downward trend and the headline rate remains on track to return to target next year. Meanwhile talk of green shoots is premature - the economy continues to struggle and the output gap remains large. Against this background, expect another tranche of Quantitative Easing once the current one is completed and more extreme policy measures such as even lowering the interest rate further cannot be ruled out.”
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Notes to editors.
KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with over 11,000 partners and staff. The UK firm recorded a turnover of £1.7 billion in the year ended September 2011. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. We operate in 152 countries and have 145,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. KPMG International provides no client services.