Britain does not need more QE, Niesr says

The strong performance of the British economy makes another round of quantitative easing unnecessary, the National Institute of Economic and Social Research (Niesr) says.

Its recommendation is based on estimates that Britain’s GDP has grown by 0.5% in the three months ending October. Although economic growth appears to be somewhat down on a month-to-month basis, Niesr says the British economy has performed strongly over the past seven months.

In October, the British economy returned to a level of growth last seen at the end of 2008. While this is good news for those that feared a double-dip recession, the latest estimate would still leave the country with a growth rate 3.6 percentage points below its pre-recession peak of March 2008. (article continues below)

Unless output turns down again, Niesr says the recession is over. Output is still much lower than during its previous peak. This is likely to continue for some time and Niesr forecasts that output will not pass its peak until 2012.