Bean denies Bank has paused QE

By David Milliken

LONDON (Reuters) - The Bank of England has not paused its 125 billion pound quantitative easing policy despite last week's decision not to boost its dwindling asset purchase funds, Bank of England Deputy Governor Charles Bean insisted on Wednesday.

Bean has embarked on a nationwide tour to explain the Bank's monetary policy to the general public, but his most striking message on Wednesday was that the media and markets had been wrong to interpret last week's terse policy announcement as the beginning of the end for QE.

"We haven't paused on QE. We are committed to buying 125 billion pounds of assets that will take us through to August," he said in an interview with the Scotsman.

Nonetheless there will be a gap of at least a week between the Bank's last scheduled gilt purchase on July 29 and its next policy meeting on August 6 -- the first interruption since the Bank started the scheme in March.

Even this has only been achieved by cutting weekly purchases to 4.5 billion pounds from 6.5 billion, and the announcement caused government bond prices to tumble, though they recouped some of their losses this week.

Bean said the Bank would consider whether to expand the quantitative easing policy -- which aims to boost bank lending during Britain's worst recession in decades -- at its next meeting in August.

"It is a natural point for us to take stock of how the programme is going and what the outlook for the economy is -- whether we need to do more, or indeed whether we have done too much," he told the Herald, another Scottish newspaper.

Economists were unimpressed by the Bank's need to clarify last Thursday's 91-word statement.