The Bank''s quantitative easing measures are yet to help, it has been suggested.
15 September 2009
The economy is yet to be significantly affected by the quantitative easing tactics taken by the Bank of England, it has been claimed.
A recent study by the British Retail Consortium found the average price of shopping decreased slightly in the last year.
The Shop Price Index, carried out by the organisation and Nielsen, found annual deflation stood at 0.1 per cent last month - with a sharp reduction in food inflation during the last six months taking its toll.
Rather than being good news for consumers, Fool.co.uk head of personal finance David Kuo stated they "should be very worried".
He explained the news shows how the measures taken by the Bank have yet to have any tangible effect, adding its Monetary Policy Committee (MPC) "will probably need to review the extra £50 billion that they''ve earmarked for pumping into the economy very shortly and may have to pump in some more".
The Bank recently revealed it has decided not to extend its quantitative easing activities yet after the monthly convening of the MPC, which also kept the base rate of interest at a record low of 0.5 per cent.
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