(Adds quotes, background)
By Dhara Ranasinghe
LONDON Oct 6 The head of bonds at the world's
largest asset manager said on Thursday that the Bank of England
could hold off easing monetary policy, as a debate swirls around
the effectiveness of its measures to protect the economy.
BlackRock's Scott Thiel said that the BoE could pause, based
on the strength of recent economic data, a day after Prime
Minister Theresa May said there had been bad side-effects from
the Bank's emergency measures since the financial crisis.
"On the current data, the BoE could pause its current easing
cycle," said Thiel, adding that the BoE had a "tough call" to
make on the economy following Brexit.
BlackRock has previously warned that Britain could fall into
recession over the coming year after the country voted in June
to leave the European Union.
Following the Brexit vote, the BoE in August cut interest
rates to a record low and began a new round of bond buying known
as quantitative easing (QE).
Asked about May's criticism of the BoE's policy, Thiel said
that the side effects of QE will be "with us for a long time"
and that the BoE has a "delicate act to balance".
Finance minister Philip Hammond will set out next month how
Britain will try to rely less on ultra-low interest rates that
have hurt savers and focus more on other ways to boost growth,
an adviser to May said on Thursday.
May said this week Britain will trigger the process to leave
the EU by the end of March, with investors worried that the
government's stance points to a so-called "hard Brexit" that
would see it left outside the single market in favour of strict
controls on migration.
The British pound fell to its weakest against the U.S.
dollar in over three decades on those worries.
"The initial stance seems more hard line than we were
expecting," said Thiel, adding that he wanted to see how this
would "evolve together" with the BOE's recent easing measures.
(Reporting by Dhara Ranasinghe; Writing by John Geddie; Editing
by Larry King)