Bank of England urged to extend quantitative easing

The Bank of England’s monetary policy committee (MPC), which meets this week, is under pressure from economists and business to extend its policy of “quantitative easing”, or creating money.

The shadow MPC, which meets under the auspices of the Institute of Economic Affairs, says interest rates should stay at 0.5% but the Bank should extend quantitative easing.

The policy, which has mainly been achieved by purchases of gilts, has so far amounted to £125 billion, within the £150 billion limit agreed with the Treasury.

The shadow MPC says the Bank should proceed with the remaining £25 billion and then go further, with between £50 billion and £300 billion of additional easing.