Bank of England to vote against stimulus

The Bank’s Monetary Policy Committee is expected to leave quantitative easing unchanged at £375bn and interest rates on hold at 0.5pc on Thursday after the economy bounced back with 1pc growth in the third quarter, reports The Telegraph.

Economists were previously forecasting a further £50bn injection of QE at the November policy meeting, but that view changed after the economy grew more strongly than expected between July and September, and the Bank’s deputy governor Charlie Bean questioned in a speech whether QE could boost growth in the current economic climate.

Howard Archer, chief UK economist at IHS Global Insight said Thursday’s decision would be a “close call” but expected no additional QE to be announced.

“We suspect that a majority of the MPC will decide to hold back from further stimulative action for now at least and see how the economy develops.”

Meanwhile economists at the Centre for Economics and Business Research said that Britain’s economy would fare better than its eurozone counterparts over the next couple of years.

Predicting that recession would continue in the eurozone in 2013, with only marginal growth in 2014, CEBR said Britain would grow by 0.8pc and 1.4pc respectively – faster than Germany, France, Italy and Spain.

“The economic situation in some parts of Europe is moving from bad to catastrophic. There is a danger that the economic problems will spill over into social breakdown in many areas of Europe as unemployment soars and governments run out of money,” said Douglas McWilliams, chief executive of CEBR.