Bronwyn Curtis, Head of Global Research, HSBC Bank Plc

With the asset purchase programme continuing until November, I don’t see any need to alter the monetary stance at this meeting.

The release of Q3 GDP later in the month should show that the recession ended in the second quarter. The indicators of activity are generally higher led by the indicators of service sector activity, but it isn’t all positive. The manufacturing PMI was weaker than expected in September and the amount of money being created is still limited. The availability of credit for corporate loans showed some improvement, but credit availability for households fell. There are still questions over the strength of the global recovery, especially in developed markets.

With rates close to zero and quantitative easing (QE) in progress, monetary policy has to be closely co-ordinated with fiscal policy. The Conservatives have already announced spending cuts if they are voted in at the next election but whoever forms the government will have to tighten policy. It is too early to begin an exit strategy but the discussions held recently by the Bank of England with market participants on QE show that the dialogue with market participants has started.

Geoffrey Dicks, Chief Economist, Novus Capital Markets

This month: no change in either rates or QE.

The MPC collectively sat on its hands last month and it should do the same again this month. QE may not be having the expected effect on credit expansion but the combination of low interest rates, loose fiscal policy and a weak pound is beginning to turn the economy round. Output is no longer falling but, so far, nor is it on a convincing uptrend. Q3 GDP may be flat on Q2. Survey data, particularly in the service sector, suggest that a genuine recovery is not far away. Even though QE is not showing up in the money supply, asset markets have bounced, notably equities, but also house prices where, despite a relative lack of mortgage finance, a renewed uptrend has taken prices back to pre-Lehman levels. This may not be sustainable but, for the MPC, rising house prices ahead of recovery in the real economy is a most unwelcome development and, further down the line, poses a potential policy dilemma.

Alan Budd, former Chief Economic Advisor to the Treasury and former member of the Bank's MPC

I think that interest rates should be left unchanged. As some of the recent numbers for the economy have been disappointing, the MPC should continue its announced programme of purchases. The decision on whether to extend them beyond £175bn can be left until the November meeting.

I’m not sure what we can expect the MPC to tell us about its “exit strategy”. The current policy stance is highly expansionary and is becoming more so each month. At some stage we can expect a period in which policy is left unchanged (i.e. there are no further purchases of assets) followed by a move to raising rates and selling the assets. The Bank has explained that it can start raising rates before it sells assets (though it has not said that this is necessarily what it will do). The Bank will reasonably decline to tell us when policy loosening will end or policy tightening will begin. That will depend on economic developments. Since this is all new territory, the more that the MPC can tell us in general about how it will respond to future developments the better.

Rupert Pennant-Rea, Chairman, Henderson Group and former Deputy Governor of the Bank of England

Nobody should be surprised if the economy’s recovery is bumpy and slow, and the latest data bear that out. Since the MPC has been flagging this pattern for several months, it can and will take a long term view of monetary policy.

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