Posen stirs Bank of England row with another QE plea

The open warfare among Bank of England rate-setters saw fresh exchanges today as dove Adam Posen called again for an extra £50 billion to be pumped into the UK economy.

Posen, who warned this week that policymakers "should not be tyrannised by popular fears or spectres of expectations", defended his stance on so-called quantitative easing at a conference in Mumbai.

The rate-setter fears spending cuts and a consumer squeeze will send inflation below target and has been pushing for looser policy since last October, but he faces a growing camp on the Bank's monetary policy committee aiming for interest rate hikes.

February's decision saw the closest vote since June 2007 with three members of the MPC voting to raise rates.

Posen's comments come after a salvo from committee hawk Andrew Sentance, who voted to double interest rates to 1% this month.

In his second speech in a week he called again for the committee to "change tack" with gradual interest rate rises to combat inflation at 4%, double the Bank's 2% target.

"The risk of delaying interest rate rises too long is that this gradual approach may cease to be an option in the future," he warned.