LONDON (SHARECAST) - Former Bank of England Monetary Policy Committee member Charles Goodhart has called on the Bank of England to stop its quantitative easing (QE) programme because it is damaging the economy.
Professor Goodhart, of the London School of Economics and a member of The Times Shadow MPC, said that instead it should cut interest rates to 0.25%, from lows of 0.5%, and start buying private sector bonds, as opposed to gilts, the newspaper is reporting this morning.
He also urged the Bank to intervene in the mortgage market through whatever channels they think would be technically best ... I would not increase QE, though I expect the MPC to do so. The damage that this does by distorting long-term interest rates to extraordinarily low levels to pension funds, those nearing retirement and savers generally is now beginning to outweigh the marginal benefit to borrowers.