Another round of QE looks on the cards

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MORE Quantitative Easing (QE) by the Bank of England is still likely for Thursday, despite recent improved economic news, according to IHS Global Insight.

Howard Archer, chief UK and European economist for IHS Global Insight, which offers economic and financial analysis, said: “We expect a £50bn dosage of QE, but a larger portion of £75bn cannot be ruled out even though this looks less likely given the recent improved economic surveys.”

He added: “Last October’s £75bn of Quantitative Easing was due to be spent by early February, and with GDP contracting 0.2 per cent in the fourth quarter of 2011 and the economy currently still facing a highly challenging environment despite an apparent pick-up in services and manufacturing in January, there are compelling reasons for the Bank of England to administer further stimulus for the economy.”