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BoE could pause QE to wait and see on Funding for Lending impact

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  • 12/12/2012
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BoE could pause QE to wait and see on Funding for Lending impact
The need to assess the impact of funding for lending may lead the Bank of England to pause quantitative easing, a Legal & General economist has suggested.

At a Legal & General Fundamentals briefing today, investment management economist Tim Drayson said although there was some evidence of mortgage rates coming down, it was still fairly early days for the government-backed scheme.

“It has taken time for the banks to withdraw all these funds and pass them through in terms of new products channel,” he said. “It will probably take a further period of time before we see the impact on corporate loans because they are more bespoke.

“This is one reason why, unless we have some crisis, the Bank of England will probably pause quantitative easing for a time – they want to assess the impact this policy is having on the economy.”

 

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