Additional stimulus may be needed in U.K.

A smooth and stable economic recovery is not yet assured, while the U.K. central bank has not ruled out additional stimulus measure, the BoE's top policymaker Martin Weale said Thursday. Amid speculations the BoE should soon end its economic stimulus, Weale still suggests the current monetary easing programme running at 375 billion pounds per month could be extended. The latest BoE's MPC minutes showed the voting composition was split 8 against 1 in favour of the proposition for forward guidance, introduced by Mark Carney. Meanwhile, the BoE was univocal at its decision to introduce no changes in its monetary policy. The only MPC member to vote against Carney's proposal was Martin Weale, who voted against just to register his preference for a shorter time horizon for the first inflation knockout, while other MPC members proposed the time frame of between 18 to 24 months. 

Furthermore, Weale expressed his concerns over high inflation, which is posing certain risks and should be taken into account, however, he is less concerned about the wage growth, as he expects a pickup in productivity without any significant growth in wages. Earlier, the BoE already mentioned that if in the upcoming 8 to 24 months the CPI were to be 0.5% or even more above the 2% target level, then they would abandon the unemployment rate threshold for tightening the key rate and the pace of its stimulus programme.