MNI BRIEF: BOE MPC Tells Staff To Work On QE Unwind Strategy

The Bank of England Monetary Policy Committee has instructed the bank's staff to begin work on reassessing its strategy when policy needs to be tightened, opening the door to earlier quantitative easing unwind, according to the minutes of the February meeting (para 73).

The current approach is to only start asset sales when Bank Rate hits 1.5%. BOE Governor Andrew Bailey has floated the idea of unwinding before Bank Rate is hiked and MNI has reported that the MPC previously debated the idea of running down QE as gilts expired, with former Deputy Governor Charles Bean backing it but ending up on the losing side. Now the whole approach is set to be addressed again.

Former-MPC member Andrew Sentance told MNI late last year that QE was now largely impotent in supporting economic activity.