PSE Blog: To QE or Not to QE
27 April 2012 (PLANSPONSOREurope.com) – The Bank of England (BoE) is contemplating calling a halt to Quantitative Easing (QE), news of which may fill many pension funds with relief. However, recent statistics have lead to warnings that by scrapping QE the bank risks seeming out of touch, writes Katherine Blackler.
The UK economy had only partly recovered when the Office for National Statistics’ (ONS) numbers showed the country had slid back into recession earlier this month, data showing a contraction of 0.2% in the first quarter of this year.
Despite the data, according to the minutes from its April Monetary Policy Committee meeting, the BoE is still determined to look through the weak growth data, with speculation that the data is due to one-off echoes from the 2008-9 recession, and call an end to QE referencing a wide range of business surveys pointing to moderate underlying growth for the first half of 2012 and the threat of rising inflation.
The prospect of an end of QE will no doubt fill many in the pensions industry with joy.
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