Leader: Action needed now as economic gloom gathers
With industrial output now adding to the litany of falling manufacturing and service activity, lower house prices, weak retail sales and falling business and household confidence, pressure is growing for action, if only to halt this decline in confidence from becoming self feeding. The Bank of England’s monetary policy committee meets today. While it is unlikely it will announce another round of quantitative easing, this is looking more likely by the year-end.
Yesterday the Institute of Directors called for “QE2”. The downside economic risks are sufficiently great, it warned, to warrant such action to avoid the risk of a double-dip recession. These risks are undoubtedly growing.