Mervyn King, the governor of the Bank of England, and his colleagues on the monetary policy committee face a quandary this week. They have to decide whether to extend the UK’s asset purchase scheme or wait to see if the measures taken so far prove effective in defeating the credit crunch.
City economists are divided over whether the Bank should stick with the current £175bn limit for the asset purchase scheme or whether it should be expanded to £200bn or even £225bn.
