Bank of England predicted to maintain quantitative easing

The Bank of England is unlikely to increase its quantitative easing programme this month, according to a financial expert.

Michael Baxter, economist at Defaqto, also said that he believes interest rates will be held by the Monetary Policy Committee (MPC) at 0.5 per cent for August.

The Bank has imposed radical policy actions since March in order to boost the flow of cash around the economy and thereby improve lending conditions for businesses and consumers.

In this way, it is hoped that the worst effects of the recession will be alleviated.

Governor of the Bank Mervyn King is known to have voted for an increase to the quantitative easing programme to £200 billion last month, rather than the £175 billion that was eventually agreed on.

Some economists have expressed concern that printing so much extra money could store up inflation problems for the future.

Mr Baxter said that runaway price rises remained a ’danger’ for the economy.

He added: ’I think it will be a surprise if they [the MPC] did anything, I don’t see the rate of interest going up and I’d be surprised if they go for any quantitative easing although Mervyn King wanted us to do more last month so if he has his way maybe they will do some more.’

The MPC announces its decision on Thursday.ADNFCR-2318-ID-19350678-ADNFCR