Bank of England policy maker Adam Posen said in an interview with the BBC that a combination of quantitative easing and credit-easing, along with financial reform, would be a “double-barrelled push” that would move the U.K. economy in the right direction. While quantitative easing will “fuel bank lending,” all these forms of “financing for SMEs will make the QE more effective,” Posen said..
Posen also said the U.K. can’t “expect growth to be strong” given the debt it carries, a financial system that’s not functioning well, rising unemployment and “understandably scared” consumers, the BBC reported. In addition, the government’s austerity program is “a drag on the economy,” Posen said in the interview.
However, while the crisis in the euro area may have an effect on the U.K., the country’s size and independent monetary and fiscal policy means “we are masters of our own destiny,” he said to BBC.