IoD reaction to MPC decision

Dated: 4 November 2010

Commenting on the Bank of England’s decision to leave interest rates and Quantitative Easing (QE) unchanged, Graeme Leach, Chief Economist at the Institute of Directors, said:

“A simultaneous launch of QE2 on both sides of the Atlantic wasn’t going to happen, but we still think the Bank of England will be forced into taking the plunge in 2011.

“The shape of the recovery is likely to resemble a square root sign with recession followed by the spurt in growth in Q2 and Q3 this year which then levels off.

“The legacy of the financial crisis, weak money supply growth and public and private sector debt leads us to believe that recent optimism over the growth outlook will not be sustained. However, in the short term we may be deceived into thinking the economy is stronger than in reality, owing to consumer spending decisions being brought forward in anticipation of the January VAT hike.”

ENDS

Contact Points

Edwin Morgan
Media Relations Manager
Institute of Directors, 116 Pall Mall, London SW1Y 5ED
Tel: +44 (0)20 7451 3392
Mob: +44 (0)7814 386 243
Email: edwin.morgan@iod.com
Website: www.iod.com/policy

Notes to editors

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