Bean pours scorn on cash vouchers plan

SUGGESTIONS that the UK government should give households a voucher to spend in shops as a cheaper alternative to quantitative easing to boost the economy have received little support from the Bank of England.

Former monetary policy committee member Sushil Wadhwani is among those who have promoted the idea of giving every adult in the country a £300 voucher.

But deputy Bank governor Charles Bean, below, speaking to the Council of Mortgage Lenders conference in London, said a temporary increase in disposable income was more likely to be saved.

“Only households that wish to borrow but presently cannot would be likely to increase their spending materially,” he said.

Bean also warned growth in the UK economy was now much more likely to be weak over the next year.

“The probability of low growth over the next year or so is materially higher now than it was in the early part of the year,” said Bean.