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Published: Wednesday February 13, 2013 MYT 7:22:00 PM

BoE's King says limits to further stimulus of economy


LONDON: Bank of England Governor Mervyn King said on Wednesday there were limits to what further stimulus of the economy could achieve.

King, speaking to reporters after the central bank published its quarterly inflation report, said the Bank remained ready to do more to help the economy if needed.

"We must recognise, however, that there are limits to what can be achieved via general monetary stimulus - in any form - on its own," King said, adding that incentives to spend now reduced spending plans of households and businesses in the future.

The Bank has spent 375 billion pounds on buying government bonds but has held off from increasing the programme.

The government debt prices fell after King's comments.

King also told reporters that the Bank should not risk tightening monetary policy, even as it pushed back its expectations for when inflation would return to its target to early 2016, because the economy remained weak.

"Attempting to bring inflation back to target sooner would risk derailing the recovery and undershooting the target in the medium term," he said. - Reuters

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