By Claire West

Commenting on the Bank of England’s decision to leave interest rates and quantitative easing unchanged, Graeme Leach, Chief Economist at the Institute of Directors, said:

“We think there is now a greater risk of a double-dip recession from a mistake in monetary policy, not fiscal policy. Money supply growth is not strong enough to be confident of a sustained economic recovery. We need to see an established private sector recovery before the public sector recession begins. A further extension in quantitative easing before year end could help avoid that double-dip. Yes QE is a crude instrument but it’s the only one available at present. As fiscal policy tightens monetary policy needs to be eased”.