LONDON (Reuters) - The Bank of England’s flagship asset purchase program has lost some of its initial impact but is still effective, while a newer scheme will be no “silver bullet” for growth, deputy governor Paul Tucker said in an interview published on Thursday.
“We still think QE works, even if in some respects it does not have the same bite it used to have,” Tucker told financial magazine Euroweek.
Most economists expect the Bank of England to expand its quantitative easing gilt purchase program in November when the current 375 billion pound ($605 billion) target is reached, though Tucker was non-committal.
“Technically we could do more. It’s just a question of what we think the risk to inflation would be. I don’t think we should just have one option in these circumstances, which is why we are pleased to have launched the Funding for Lending Scheme,” he said.
BoE policy minutes have shown that some officials believe the FLS could be powerful enough to render further asset purchase unnecessary in November.
Tucker said he believed the FLS would help, though it was not the answer to all Britain’s economic problems.
“There are no silver bullets. People rightly point out that there may be weak demand for credit,” he said.
Reporting by David Milliken and Olesya Dmitracova