World Economic

Bank of England policy maker Adam Posen may back an extension of the bank’s asset purchase program from the current 175 billion pounds ($286 billion) to help the economy recover from the recession, the London-based Sunday Times reported, citing an interview with Posen.

“It goes back to how much you think there is real overshooting and inflation risk, and how much you think the financial system has recovered,” he said, according to the Sunday Times. “My answer to the first is that I’m not worried about overshooting inflation right now. The answer to the second is that we’ll have a forecasting round and we’ll decide.

“My personal view is that if you look at the things we’re looking at” then “we’re not there yet,” the newspaper cited him as saying.

Posen said that the bank is now coping with “a normal recession” which has been “pretty severe” and is now “bottoming out,” the Sunday Times reported.

“The biggest risk to a sustainable private-sector recovery is that the banking system problems are not fully resolved by the time we have to pull back,” the paper cited Posen as saying.

Asked about how long the Bank of England will need to do asset purchases, Posen said: “There will come a point when it’s not needed. One thing the world doesn’t need now is disorderly markets. From a monetary-policy point of view we want to make this a smooth transition.”

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