{"id":2817,"date":"2009-05-07T11:49:00","date_gmt":"2009-05-07T11:49:00","guid":{"rendered":"https:\/\/mmm.9dotdigital.ca\/?p=2817"},"modified":"2025-03-27T15:48:51","modified_gmt":"2025-03-27T15:48:51","slug":"quick-comment-on-mpc-announcement","status":"publish","type":"post","link":"https:\/\/mmm.9dotdigital.ca\/?p=2817","title":{"rendered":"Quick comment on MPC announcement"},"content":{"rendered":"

The MPC’s announcement of an expansion of QE has come earlier than expected but is warranted by recent news – particularly the disappointing money numbers for March discussed in an earlier post<\/a>.<\/p>\n

The Bank of England will expand its QE operation from £75 billion to £125 billion by extending the current buying programme by a further two months to early August. Purchases are running at about £25 billion a month, with the total currently at £52 billion. The MPC has scope to boost the programme by a further £25 billion within the existing £150 billion authority granted by the Treasury.<\/p>\n

The MPC’s statement sounds more hopeful on the economy, noting “promising signs that the pace of decline has begun to moderate”. This suggests that next week’s Inflation Report<\/em> will retain the optimistic recovery profile shown in February – the MPC’s forecasts could be similar to the Treasury’s, which have been widely ridiculed. CPI inflation has recently been well above the Bank’s projections but the statement claims that a fall below the 2% target is still likely later this year, reflecting favourable food and energy price effects and a sharp easing in pay pressures amid rising economic slack.<\/p>\n

Even after today’s expansion, the UK’s QE operation is smaller than the equivalent US initiative. The Federal Reserve is committed to buying up to $2 trillion of securities by the end of 2009, equating to 14% of US annual GDP. The Bank of England’s new £125 billion target amounts to 9% of UK GDP.<\/p>\n","protected":false},"excerpt":{"rendered":"

The MPC’s announcement of an expansion of QE has come earlier than expected but is warranted by recent news – particularly the disappointing money numbers for March discussed in an earlier post. The Bank of England will expand its QE operation from £75 billion to £125 billion by extending the current buying programme by a […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-2817","post","type-post","status-publish","format-standard","hentry","category-money-moves-markets"],"_links":{"self":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/2817","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2817"}],"version-history":[{"count":1,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/2817\/revisions"}],"predecessor-version":[{"id":5126,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/2817\/revisions\/5126"}],"wp:attachment":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2817"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2817"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2817"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}