adminchief Mervyn King come after the BoE and its counterparts in Japan, the United States and Europe unleashed huge policy easing measures to stoke growth as the global economy slowed.
“Relying on generalised monetary stimulus alone is not a panacea. As time passes, larger and larger doses of stimulus are required,” King said in a speech to the Japanese Bankers Association in Tokyo.
Britain’s top central banker added that while monetary policy “can do many things” it cannot tackle huge government debts or solve structural issues in the economy, such as ageing populations which have strained government resources worldwide.
London, Tokyo and Washington are all grappling with reining in their massive public debts while trying to stoke growth.
King’s comments come after minutes from a BoE meeting this month showed he unsuccessfully advocated for more quantitative easing as Britain faced the prospect of a third recession in five years. King is to step down later this year.
Moody’s yanked Britain’s triple-A debt rating last Friday, citing weak growth and high debt.
Under the BoE’s quantitative easing, the central bank creates cash that is used to purchase assets such as government and corporate bonds with the aim of boosting lending and in turn economic activity.
King shrugged off fears over a global currency war, as Tokyo faced heavy criticism from overseas that it was using monetary policy to push down the value of the yen to gain a trade advantage. – AFP.
Online Reporter