Bank urged to pump in more cash

The Bank of England must double the £75bn it agreed to pump into the economy last month to release liquidity into the market place, according to a regional business spokesman.

Andrew McCutcheon, of the Federation of Small Businesses, said he favoured another £75bn cash injection into the economy following the latest round of quantitative easing.

“It comes back to the European situation, the possible need to support the banking industry further and get liquidity into the market place,” he said.

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Mr McCutcheon was speaking at a meeting of the Shadow Monetary Policy Committee (MPC), which meets in Leeds to discuss the national economic picture.

The panel, chaired by Jonathan Oxley, managing partner at Lee & Priestley, in association with the Yorkshire Post, agreed that targeted capital expenditure was needed, particularly in Yorkshire, and that the biggest issue holding back private sector recovery was liquidity.

However, the group was divided on whether further quantitative easing was necessary at this stage. Bill Cowling, of the Great Yorkshire Show, said: “None of us is sure what it is used for so I don’t think it’s a good idea to print more money.”

Speaking about the economy generally Paul Lawrence, of financial planners Lawrence Schoffield, said “The future is optimistic but it will be challenging indefinitely.”

The panel voted to keep interest rates on hold at 0.5 per cent.