LONDON (Reuters) - Bank of England policymaker Paul Fisher said on Sunday the central bank was unlikely to do more quantitative easing if the economy stayed on its current path and did not contract over the next few months.
The Bank surprised markets in October by deciding to restart its programme of gilt purchases funded by newly-minted money earlier than expected, going on to buy 75 billion pounds’ worth of gilts over four months, largely to shield Britain from the euro zone crisis.
Fisher voted with the majority of the Bank’s Monetary Policy Committee earlier this month to increase the size of the quantitative easing programme by 50 billion pounds to 325 billion pounds.
“For me the big question last October was the risk of the economy slipping back into another recession... We actually had quite negative growth in the fourth quarter,” said Fisher, who is also the Bank’s executive director for markets.
”Now, at the moment the downside risk from that does not seem to be crystallising, we don’t seem to be continuing to slide down into negative growth territory.
“If that is what it looks over the next few months, that will put more weight on the arguments for stopping (QE) rather than carrying on,” he told Sky News television.
He added that the central bank would most probably wait until May - when it next updates its growth and inflation forecasts - to decide whether to expand the QE programme again. ($1 = 0.6306 British pounds)
Reporting by Tim Castle and Olesya Dmitracova