Bank of England’s Spencer Dale hails success of £200bn quantitative easing

The Bank of England's Spencer Dale today said he had little doubt that the huge rise in prices of shares and corporate bonds were "substantially" helped by the £200 billion quantitative easing programme, which is a year old almost to the day.

Many City analysts are concerned that the Bank's decision to pump new money into the economy has created an artificial bubble in asset prices that will end painfully as the stimulus is removed.

But Dale, a member of the monetary policy committee which sets interest rates and QE, said the contrary was true: "These [price] movements have been very beneficial for the economy."

He added that while it was too early to say conclusively how successful the programme had been, "one year on, there is a range of evidence to suggest QE is having its desired effect.

"Asset prices have increased substantially, companies have made record recourse to debt and equity markets, confidence has recovered and inflation expectations remain firmly anchored. But there is still a long way to go."

Many analysts are concerned about how the Bank will now extricate itself from the programme, fearing that as it starts to sell off all the bonds it has bought from banks, so prices will tumble and yields will shoot up, destabilising markets.