Bank of England's new chief to keep policy as is for at least 18 months: Reuters poll

Wed Nov 28, 2012 9:57am EST
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By Jonathan Cable

LONDON (Reuters) - It will be the second half of 2014 at least before the Bank of England's new chief, Mark Carney, changes monetary policy as he grapples with a sluggish economy, a Reuters poll found on Wednesday.

The poll of 66 economists, largely taken after news on Monday of Carney's appointment as BoE governor starting in July 2013, did not see any top up to the Bank's 375 billion pound quantitative easing asset purchase program.

They also did not see any shift in interest rates away from their record low of 0.5 percent, until July 2014 at the earliest. That is the length of the polling period.

None of the policy-watchers polled saw any rate move at the next meeting on December 6, or indeed until early 2014.

"The Monetary Policy Committee decisively rejected the option of delivering more QE in November and we expect the committee to follow a wait and see strategy for the time being," said Philip Shaw at Investec.

In its effort to support an economy that fell into two recessions in the space of four years the central bank embarked on a quantitative easing program, buying up government bonds to boost the money supply and promote growth.

But it has now turned off its printing presses as inflation remains stubbornly above the Bank's 2 percent target. The poll gave just a median 40 percent chance of more easing -- down slightly from 45 percent seen only two weeks ago. <ECILT/GB>

"We don't expect any additional QE as long as the economy develops broadly in line with our forecasts," said Chris Crowe at Barclays Capital.   Continued...

Bank of Canada Governor Mark Carney arrives at a news conference in Ottawa November 26, 2012. REUTERS/Chris Wattie