In an interview with the Scottish Herald, Weale (pictured) said an interest rate cut would be preferable to more QE, providing it could be shown that a cut would not cause banks to rein in lending.
Weale was one of seven MPC members to vote for a further £50bn of QE last month, bringing the total amount of easing to £375bn, though the effectiveness of the bond-buying programme has increasingly been called into question.
“If it were clear that the interest rate could be reduced … without finding some banks got themselves into a position where they had to reduce lending because of the effects of an interest rate cut on their profits [and] if it were clear a reduction in interest rates would be like all other reductions in the interest rate, I think I would probably prefer that to more QE, if I was choosing between them,” he told the paper.
A paper published by the BoE this week declared most people in the UK, including savers and pensioners, would have been worse off without QE.
The BoE’s latest inflation report saw Governor Mervyn King dismiss suggestions the programme was providing diminishing returns, though he gave no clear indication whether the Bank would continue to ease once the programme reached its current £375bn target in October.
The Bank has said it will assess the impact of its Funding for Lending scheme before looking again at a cut to the base rate of interest, which has remained at a record low of 0.5% for the past 41 months.
