Bank of England official signals no near-term quantitative easing

Bank of England Deputy Governor Dave Ramsden has indicated that further quantitative easing is not expected in the near term. The central bank remains focused on quantitative tightening, continuing to reduce its balance sheet of government bonds.

While the Bank Rate was recently held at 3.75%, Ramsden warned that persistent energy price elevations could necessitate future interest rate hikes. The Monetary Policy Committee noted that prolonged energy price volatility, driven by conflicts in the Middle East, poses a risk of inflation rising to approximately 3.75% in Q4 2026 and exceeding 4% in Q1 2027.

Policymakers are monitoring for second-round effects, where energy shocks impact wages and food prices. Although Ramsden noted that food-price inflation has been weaker than expected and significant second-round effects have not yet materialized, he cautioned that if upside inflation pressures continue to build, a case could be made for raising the Bank Rate.