Bank's Barker - Too soon to see lending impact from QE

LONDON (Reuters) - It is too early to expect the Bank of England's asset purchase programme to have much effect on bank lending but the scheme should impact more strongly next year, Bank policymaker Kate Barker was quoted as saying.

In an interview with the Hull Daily Mail, she said: "I wouldn't have expected to see really major results yet in terms of banks being in a better position to start to lend.

"They have improved their capital position a bit, which is a good thing. I would expect the impact to come through more strongly next year," she said in remarks published in Wednesday's edition of the newspaper.

The central bank embarked on its unprecedented 125 billion pound quantitative easing programme in March, when it also slashed rates to 0.5 percent, to boost bank lending and pull Britain out of its deepest downturn in decades.

But there has been little sign yet the policy is working and in fact borrowing rates have been edging higher and many consumers and businesses still face difficulty obtaining credit.

Touring the country this week to explain the scheme, Bank Deputy Governor Charles Bean has stressed that it could take at least 6-9 months and maybe as long as a year for the effect of the asset purchases to filter through to the wider economy.

He has also been keen to emphasise that the central bank's decision last week not to extend the programme to the full 150 billion pounds sanctioned by the government did not mean it was preparing to exit the strategy.

Analysts polled by Reuters reckon the central bank will up the QE programme to 150 billion next month, when it will have updated quarterly growth and inflation forecasts.

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