It is still too early to establish whether the Bank of England�s quantitative easing programme that has pumped billions of pounds into the flagging economy had worked, policymaker Timothy Besley said yesterday, writes Douglas Hamilton.

It is still too early to establish whether the Bank of England's quantitative easing programme that has pumped billions of pounds into the flagging economy had worked, policymaker Timothy Besley said yesterday, writes Douglas Hamilton.

"We will not know for sure whether QE has been directly effective in supporting nominal demand growth for some time and a definitive assessment right now would certainly be premature," Besley said.

He also said it is too soon for the central bank to judge when it will need to start withdrawing the £125bn stimulus scheme it has delivered to the economy.

"Just as with monetary policy conducted by adjusting Bank Rate, there is little point now in trying to speculate about the quantitative nature of the trigger events in the data that would lead to policy tightening," Besley said in a speech to a financial regulation conference at the London School of Economics.

"It will be the forward-looking implications of these data that are essential to any such decision," he said, stressing the Bank of England's commitment to its 2% inflation target.

He said worries that quantitative easing and record low interest rates would drive inflation above the target were undermined by the fact that inflation expectations remained anchored close to 2% and that financial markets were still in disarray.

"These arguments, in my view, undermine the knee-jerk reaction to QE and the response that it will inevitably lead to a period of above-target inflation in the medium term."

Besley, who will soon leave the central bank's rate-setting Monetary Policy Committee, said the quantitative easing strategy had been designed to target medium-dated gilts in order to reduce the risk of banks' hoarding liquidity, which would have been greater if it had focused on shorter maturities.

But he said it was too early to know if the policy was having the desired macroeconomic effect.

In the longer term, Besley said that a greater understanding would be needed of the role of financial market frictions on the way monetary policy works through the economy.