UK may consider £50-bn economic stimulus
04 Jun 2012
The UK's monetary policy committee (MPC) may decide to pump in additional £50 billion to stimulate the country's economic growth amid depressing manufacturing data and growing concerns over the European credit crisis, according to TheTelegraph report on Sunday, citing leading economists.
In its May review, the MPC decided against further quantitative easing (QE) to spur economic growth, after injecting £325 billion and keeping the benchmark interest rate at a record low level of 0.5 per cent.
Subsequent economic data from the office of national statistics revealed further weakening of the British economy which has entered into a double-dip recession by registering a 0.3-per cent contraction consecutively for two quarters ending December and March.
The Markit UK manufacturing purchasing manager's index (PMI) released Friday indicated the fastest contraction in three years signaling a continuing recession. (See: Manufacturing in Britain shrank fastest in three years in May: study)
"The MPC cannot ignore this weaker news and we have thus changed our call for £50 billion more quantitative easing to be announced at the 7 June policy meeting," quoting George Buckley, economist at Deutsche Bank The Telegraph reported.
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