Bank of England Governor Mervyn King has said the bank may have to restart its asset-buying programme if the UK's economic outlook worsens. The BoE paused its 11-month-old 200 billion pounds asset-buying - or quantitative easing - earlier this month and said that the programme could be revived if economic conditions deteriorated. But many analysts think there is little chance of more QE and are predicting monetary tightening later this year.
Speaking before a parliamentary committee, King said that while the serious risks of another Great Depression had diminished, the UK economy was not out of the woods yet. He described the recovery as 'fragile'.
Asked whether he thought more QE would be needed, King said: 'It may be. We'll have to see how things pan out. My particular concerns at present derive from the state of the world economy.' He said recovery in the euro area - the UK's largest export market - appeared to have stalled. Another BoE official, David Miles, said that the decision on whether to increase QE in February had been for him, very finely balanced.