GDP drop may not push MPC into action

Although a strong case could be made for resuming quantitative easing (QE) at this month’s Monetary Policy Committee (MPC) meeting, the Committee has given no indication that it is on the cusp of doing more. But the MPC may announce that it is reinvesting the proceeds from the first gilts that are due to mature. And if the economic data stay weak, the MPC will restart QE before long. What’s more, in his testimony to the Treasury Committee on the morning of the meeting, Governor-to-be Mark Carney is likely to confirm that he is open to a change of framework.