Door still open to more QE

Although the Monetary Policy Committee (MPC) voted to halt its quantitative easing (QE) programme in November, it has since turned out that policy is just being loosened in another way, namely via the Chancellor’s raid on the QE fund. And the MPC has given plenty of indications that more stimulus might yet be required. We expect more QE in February, although the chances of a near-term interest rate cut now look slim. Meanwhile, Mervyn King’s successor, Mark Carney, is well-qualified but will face significant new challenges during his five year term.