Analysts say more quantitative easing on way to arrest recession fears

HEIGHTENED fears of another recession mean it is “touch and go” whether the Bank of England will this week order another dose of emergency measures to support the UK economy.

With growth stunted by the collapse in consumer confidence amid the Government’s budget cuts and the eurozone debt crisis, the Bank’s Monetary Policy Committee (MPC) is believed to be poised to launch another round of quantitative easing (QE), or money printing.

Most economists now think the MPC will order more stimulus measures, with its meetings this Thursday, or the meeting scheduled for November, seen as the most likely times to act.

It would be the MPC’s first change of policy since November 2009, when it opted to raise the level of QE by £25 billion to £200bn, or 14 per cent of GDP.

When the committee met last month, only one of its nine members voted for more QE but most said it was increasingly likely further monetary loosening would be justified.

Since then, fears over the global economic outlook have intensified amid mounting speculation that Greece will default and growing signs the slowdown is spreading to emerging economies, including China. Howard Archer, chief economist at IHS Global Insight, said it was “touch and go” whether more QE will be announced on Thursday, or if members will wait for a month when they are armed with its quarterly inflation report and third quarter GDP figures.