MPC unlikely to wait for long

We have long argued that the MPC’s next move would be to loosen monetary policy by restarting quantitative easing (QE). But suggestions that they might do so as soon as last week always looked a bit premature. For a start, while the latest activity surveys have been undeniably weak, there are reasons to think that the economy has still expanded in the third quarter. Moreover, some members of the Committee may be reluctant to re-start QE while inflation is considerably above its target and set to rise further over the coming months. But unless the news on the economy does not improve dramatically in the coming weeks, more QE is unlikely to be far off.