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The Bank of England today poured cold water on reports of an emergency meeting with top City economists over its radical quantitative easing policy.
Bank insiders dismissed claims it was summoning London's leading economists to Threadneedle Street for a crisis meeting as the pound dives against the dollar and the euro.
The Bank said the meeting scheduled for Tuesday was merely intended to update the City on the scheme's progress now that quantitative easing has been running for six months.
Sterling ticked slightly higher against the dollar — up 0.09 cents to $1.6350 — but was weaker against the single currency with the euro up 0.14p to 90.28p.
The pound has been under pressure since the Bank extended its quantitative easing programme by £50 billion to £175 billion in August.
Governor Mervyn King wanted to raise it even more to £200 billion, and although he was outvoted, many in the City believe the Bank may extend the programme again, possibly in November.
The controversial scheme — seen by many as a form of printing money in a similar way to Zimbabwe and Weimar Germany — has its detractors and some fear the pound's slump shows markets are losing faith.
There has also been speculation that the Bank might cut the interest rate it pays on the reserves banks hold there.
The seminars on Tuesday will be held by Bank deputy governor Charlie Bean, chief economist Spencer Dale, and executive director for markets Paul Fisher.
Reader views (7)
Only a fool would even consider joining the Euro!
- Dom Roberts, bedfordshire UK
Britain will have to stop printing money at some stage and it is only then that the full scale of the economic crisis will be felt and understood by the public. Sterling was believed to be named after the Hanseatic League Trading Hall in London, they did not allow politicans to mess with their money. Lets get on with the pain its coming at sometime!!!
- Andrew, London
How would joining the Euro help?
We would loose our flexible exchange rate and our ability to set intersts rates and pursue our own fiscal policy.
Europhiles should remember that after 13 of Brown/New Labour the UK no longer meets the entry criteria anyway.
- Andrew, Ely UK
Well Brian damned if you do and damned if you dont - if we had been in the euro before meltdown we would be in a far worse state than we are in now - at least we have the freedom to chose our own interest rates for example. Problem is now with all that QE cash sloshing around poor pound is going to cop it bad, whether Eurozone would take us in bearing in mind all the risks that UK is exposed to must now be questionable
- Wallytrader, London
All the numpties that want us to join the euro should just take a look at the mess it's caused in Ireland, Spain, Portugal, Italy and Greece! We're in enough trouble with interest rates at half those in the Eurozone. Even the Germans would go back to the Deutschmark if they could. There's also no way that the other governments would allow the UK to join monetary Union with GBP and the EUR close to parity.
- Paul, London
It will be such a sweet irony when a Tory government led by David Cameron is forced to take us into the Euro as our own currency becomes unsustainable - a result of the disasterously unbalanced economic policies of Thatcher, continued by Blair and Brown
- Nigel Crossan, London n4
Join the Euro !
- Brian, Wiltshire
