ASTL16: BoE running out of fiscal ammo
The Bank of England, and indeed other Central Banks, are running out of options when it comes to fixing the underlying issues facing their economies, Association of Short Term Lenders CEO Benson Hersch has warned.
Hersch (pictured), speaking at the ASTL annual conference, raised concerns about moves by Central Banks to cut interest rates and expand quantitative easing as a way of dealing with “deep underlying problems” in their economy,
Recently the BoE cut interest rates to the lowest level since 1640, 0.5%, and Hersch warned that governor Mark Carney may be running out of places to turn.
He said: “The thing that concerns me is that Central Banks are cutting rates as a way of trying to deal with deep underlying issues in their economies.
“There’s no ammo left to resolve these issues if the Bank reduces rates.”
But he said it isn’t all doom and gloom for the UK. “We need to look at the exit from the EU as a ‘Brennaisance’ and an opportunity for the market,” he added.
Hersch was speaking at the ASTL annual conference at Painters Hall, London.