Bean says QE signals encouraging

Bank of England Deputy Governor Charles Bean said he was encouraged by the early impact of quantitative easing and saw no reason why the government would not approve an extension of the scheme if the Bank asked for it.

"It will take time for the effect of QE to percolate through to the economy. Our take is that the current signals are moderately encouraging," Bean said in an interview published on the KentOnline website.

The central bank embarked on a policy of buying government bonds with newly-created money in March and expects to hit its £125 billion target by the end of the month.

The government has authorised the central bank to buy assets worth up to £150 billion under its QE programme in the first instance.

If we want to go above £150 billion, the governor would write to the Chancellor to seek his permission and I don't see why the Chancellor shouldn't provide that," Bean said.

He said the aim of the programme was to stimulate growth in spending to past levels.

"We want to get it up to the sort of rates we saw in the preceding decade or so and that would be consistent with the economy operating at a decent rate and us meeting our inflation target," he said.

Bean is on a week-long tour of the country to explain the central bank's quantitative easing strategy to the public.

- Reuters