- BoE Governor Mervyn King
The Bank of England is likely to announce fresh stimulus soon, in order to boost a flagging economy, as the forecast for the inflation has been raised. The average inflation rate in the 2013 will stand at 2.1 per cent, above central bank's 2 per cent target. The current total amount of government bonds bought by the BoE is almost 375 billion pounds, while it is likely to be expanded by 50 billion pounds next month.
"I'm on the verge of throwing the towel in about forecasting more QE and saying no more," said Alan Clarke, an economist at Scotiabank Europe Plc in London. "If you want to justify stimulus on the basis of the inflation outlook, there isn't one. More would mean they're turning a blind eye to inflation and focusing on growth."
"There is no technical limit on the asset purchases ... (but) I think there is a deeper question about whether there are limits to what monetary policy as such can do," said BoE Governor Mervyn King.
The FTSE 100 Index edged higher 0.92 per cent to 5,829.75. The broader FTSE All-Share Index gained 0.86 per cent to 3,043.58.
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