July 23 Bank of England economist Paul Fisher
credited quantitative easing and the bank's Funding for Lending
Scheme for the recovery that kicked in last year in an interview
on Wednesday with the Independent.
Fisher, who has left the Bank of England's Monetary Policy
Committee after five years and will move to the bank's
regulation arm, told the newspaper that bond sales should only
start after rates have been lifted high enough to cut again in
"A number of our policies had very big powerful effects on
the recovery phase, and, without doubt, things would have been
much worse if we hadn't stuck to our guns," Fisher told the
Fisher, who has been under fire from lawmakers over the
BoE's handling of alleged manipulation of London's currency
market, defended the bank's actions saying he thinks the idea
that the bank behaved improperly is a "non-story."
He called his move from the monetary policy committee to the
regulation arm "incidental."
Fisher, who leaned toward the dovish end of the spectrum
during his time on the committee, dismissed the hawkish argument
of the Bank for International Settlements that rates should have
been higher in the United Kingdom before the crisis.
"We had the highest interest rates in the G7 for most of the
10 years leading up to the crisis," Fisher said.
"That had given us an overvalued exchange rate. Short-term
money was flooding into the UK to take advantage. That was
giving us a big current account deficit. That money went
straight into the banking system. So the right policy
prescription would have been to put interest rates up? I don't
think so. It would have meant more hot money coming in making
the problem worse."
(Reporting by Aashika Jain in Bangalore; Editing by Lisa