LIVERPOOL Chamber of Commerce chief executive Jack Stopforth is urging the Bank of England’s Monetary Policy Committee (MPC) to be bolder after it held back on pumping more emergency cash into the economy.After its latest monthly two-day meeting, the MPC kept its quantitative easing (QE) stock at £325bn, after injecting £50bn in February, while holding interest rates at a record low of 0.5%.The decision follows a number of positive surveys that have suggested the economy returned to growth in the first quarter of the year.But the upbeat mood in the City was jolted by figures showing a surprise contraction in manufacturing activity in February.Many economists still expect another multi-billion pound cash injection from the Bank later in the year.Mr Stopforth said: “Following the February increase in QE, the decision to keep interest rates and the QE programme on hold was widely expected.“With QE still being implemented, and given the MPC’s self-imposed practice of only buying gilts, this was the right decision.“However, last month two MPC members voted for an increase in QE to £350bn. While support for this may be strengthening, we believe that adding to QE would be unnecessary.“The main policy aim must be boosting the unduly low rate of economic growth by increasing lending to viable businesses.“To achieve this, it is vital to make the new credit-easing scheme more substantial. But the MPC also has a part to play.“The committee should reconsider its reluctance to include assets other than gilts in the QE programme, such as securitised SME loans.“This will make the banks less risk averse, and will help to improve the flow of lending to credit-worthy firms.”Read
