Economic Update - MPC Still Not Finished

Roger Bootle's response to September's MPC meeting

• This month's meeting was always likely to be a non-event, with the Committee just opting to continue with the extra £50bn of quantitative easing (QE) it voted for last month. But once these purchases are completed in November, I expect the Committee to pump yet more billions into the economy.
• There is no doubt that the economic recovery is continuing to pick up steam. But the UK is already lagging somewhat behind other countries. Whereas economies such as France and Germany expanded in Q2, GDP in the UK fell by 0.7%.
• The UK should nonetheless pull out of recession later this year, if it has not done so already. And some parts of the economy are doing pretty well. House prices on the Nationwide index rose for the fourth month in a row in August. And the headline activity index of the CIPS/Markit report on services rose to its highest level in nearly two years.