Does the UK need more QE following higher-than-expected growth figures?

Felix Martin, economist, Thames River Global Credit Team The first lesson any central banker learns is that monetary policy works with a lag; what matters is the state of the economy six months from now, not six months ago. In my view, there are therefore two reasons why the MPC are likely to disregard the recent GDP print when deciding the future of QE. First, the direction of fiscal policy in the UK. In its recent Comprehensive Spending Review, the coalition government confirmed it will embark on cuts that will withdraw 1.5%-2% of nominal demand from the economy every year for the ne...