Rate-stter Adam Posen in call for Bank of England to start printing money again
Rate-setter Adam Posen openly called on the Bank of England to crank up the printing presses again today and warned that the UK is "a long way from home" on the road to recovery.
Posen's decision to back more quantitative easing brings the growing splits in the Bank's Monetary Policy Committee into the light, and puts him up against hawkish Andrew Sentance — who is pushing for interest rates to be lifted from their 0.5% record low.
He argues that policymakers, who paused in their £200 billion efforts to boost the money supply earlier this year, "should not settle for weak growth out of misplaced fear of inflation". The UK economy was a "long way from home and a long, long, way from overheating" despite inflation being above target at 3.1%, he added.
Posen said his vote in next week's MPC's meeting was not a "foregone conclusion", and his comments look set to herald the first three-way MPC divide since August 2008, when David Blanchflower called for interest rate cuts but Tim Besley voted to hike.
In a speech in Hull, Posen said: "This is a worse fire than any of us have ever seen in our lifetimes, and we are farther from home than we have ever been, and so we cannot judge our progress by how much effort or resources we have already put in."
