Ignis: QE needed to avert double dip

Ignis' chief economist Stuart Thomson believes another round of quantitative easing "on a larger scale and over a longer period" is needed on both sides of the Atlantic to avoid a double-dip recession.

Thomson says the Federal Reserve needs to inject $2.5trn-$3trn into the US economy to get consumers and corporates investing again – a significant increase on the $1.25trn programme implemented last year. Although companies have the means to invest, they are exhibiting a degree of caution, with the US only seeing a small bounce in investment this year, despite cash levels as a share of GDP being at a 50-year high, Thomson warns. He believes forward interest rates are one reason for a lack of investment: “Companies are looking at payback periods and seeing that forward interest rates a...