How will the MPC react in June?
As we move towards the Bank of England MPC meeting later this month analysts are already queuing up to give their advice and their views on the way ahead. Analysts are split as to whether quantitative easing has had any significant impact so far and whether UK base rates should remain at 0.5%. While the consensus seems to be towards no change in base rates there is a feeling among some analysts that the government will need to increase the quantitative easing budget to make any significant impact on the economy.
March figures were very much inconclusive with regards to the ongoing success or failure of quantitative easing and while we should see more information in June many are concerns that the billions upon billions invested as part of a scheme are disappearing down a large black hole. Initially quantitative easing did appear to be having an impact but it has been ignored over the last few weeks. Indeed it has been very little increase, if any, in the liquidity available to consumers in the UK banking sector which is above all the main reason why quantitative easing was introduced. June could very much be a make or break month for the UK government and its policies towards the UK economy.
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