Quantitative easing to remain unchanged

Further quantitative easing may not be of much benefit to the economy, it was suggested

Quantitative easing (QE) volumes are predicted to remain unchanged at £375bn, with interest rates also likely to be held (0.5%), it was reported by a think-tank in the Telegraph.

Previously economists were forecasting at least a further £50bn injection of QE, but after better-than-expected Q3 GDP figures, the Bank’s deputy governor Charlie Bean queried how effective QE would now be in the current climate.

In other economic news, economists at the Centre of Economics and Business Research (CEBR) predicted the British economy would come out of the next few years in better shape than its eurozone partners.

Britain’s economy is set to grow by 0.8% and 1.4% respectively in 2013 and 2014, outpacing France, Germany, Italy and Spain.

But uncertainty and worry across Europe is likely to continue for the foreseeable future, it was warned.

“There is a danger that the economic problems will spill over into social breakdown in many areas of Europe as unemployment soars and governments run out of money,” said Douglas McWilliams, chief executive of CEBR.