September 27, 2011 / 3:35 PM / 8 years ago

BoE's Posen: looser policy could help world economy

BERLIN, Sept 27 (Reuters) - Looser monetary policy could help the world economy, Bank of England policymaker Adam Posen said on Tuesday, reiterating his call at the end of last month for G7 central banks to consider further economic stimulus.

“We are not really in a liquidity trap and if we are not in a liquidity trap monetary policy still works,” he said at a conference on trans-Atlantic economic challenges organised by the think-tank Bruegel in Berlin.

Posen has advocated an expansion of the BoE’s 200 billion pound asset purchase programme since October 2010, and as of last week economists polled by Reuters see a 75 percent chance that the BoE will follow this course in October or November.

In a column for Reuters on Aug. 31, he said that there was “no excuse for inaction”, and that central banks across advanced economies should buy more financial assets in a last-ditch attempt to support growth.

Earlier on Tuesday, Posen also said that he expected the euro to survive the crisis of confidence over the sustainability of peripheral economies’ fiscal positions. (Reporting by Eva Kuehnen, writing by David Milliken; editing by Anna Willard)

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