What happens when quantitative easing stops?

Mitch

"So Gordon Brown's appointees to the Monetary Policy Committee will face a momentous decision: do they keep financing the government, for a few months more, despite inflation potentially being close to double their target?"

Like the PM its a no brainer really.As long as the tide can be kept out until he is out of office he will do anything.

Hugh

Yes, so it is the Members of the Monetary Policy Committee who are keeping the Governments feet away from a very hot fire.
Please remind me of their names when Brown appointed them, and whether the Spectator thinks they have adequate qualifications.

JohnRS

As the overriding interest of all Gordon Brown's colleagues, appointees and other bought and paid for quangocrats is to ensure that the aims of the Labour Party are supported at all costs I dont think they'll find this a very difficult decision to take.

Don't expect the presses to stop turning anytime soon.

Tankus

Welcome to the Weimar Republic.

Ivy Eileen

Another interesting graph would be one showing the pricing difference between UK and German credit default swaps.

As I've posted before, this "quantitative easing" is merely replacing one I.O.U. by another. It's just one pocket of UK plc replacing another pocket of UK plc as debtor. Fine, if you are pumping money into the system to overcome a temporary cashflow problem - but UK plc has a stonking great and growing hole in its finances .... and how much has been pumped out and for how long will it last and with what tangible benefit ?

Labour apologists talk about UK plc having the benefit of "starting from a position of strength" which (whilst feeble) is a bit like the Irish joke that, if you wanted to get to Y, you wouldn't have started at X. It's pointless looking at your starting position when you're coming a bad last in the race. Brown seems to have no idea of reality - let's keep printing money and throw it around in another "headline initiative" - how much has he promised in Copenhagen in the latest wheeze ?

This isn't just scorched earth, it's insanity .... and guess who has to face the consequences. Tim Congdon in The Spectator (25th October '08) described it all as "economic and financial sado-mechanism".

Billericay Dave

This is truly terrifying gordo will of course will want to continue QE until the election then blame the tories when it all goes down the pan.

I know it sounds defeatist but maybe it would be better to lose the next election let labour preside over the stopping of QE and the subsequent crash, then pick up pieces when they get kicked out for good.

Minnie Ovens

Is Brown Flashman?

Snowman

Mark:

The points you’re making are valid, but there’s one aspect of quantitative easing that has escaped attention so far. The Bank buys in paper with coupon rate higher than that on the newly issued gilts it sells to the market to finance the deficit. It’s only a guess based on the fact that the cost of money has never been as low as at present. If this is the case, there seems no need to stop the ‘easing’ until the outlay required to service the new debt equals that of the old.

Jim

"So Gordon Brown's appointees to the Monetary Policy Committee will face a momentous decision: do they keep financing the government, for a few months more, despite inflation potentially being close to double their target?"

They better had, otherwise they might find themselves going for a long walk in the woods, and not coming back.

Of course they'll keep the presses rolling. They're bought and paid for, as far as Labour are concerned.

john miller

I'll let Coffee Houser's into the secret of future financial security, now that I have cornered the market in the soon indispensible commodity.

Wheelbarrows.

You won't be able to go down to the shops without one.

Tankus

@Billericay Dave "This is truly terrifying gordo will of course will want to continue QE until the election then "

Good indicator of when Flash is going to call the election , QE is supposedly to end in Feb , If it gets extended , it's a May election then .

Edward Sutherland

Why would any sane international investor want to buy gilts when there are German government bonds on offer, whatever the higher rate of interest on offer from HMG? The ratings agencies, shamed over the sub-prime fiasco, aren't going to be caught out again quickly, so this is all going to end very nastily for GB's one and only GB- and the rest of us.

Chris lancashire

Billericay Dave's comment is truly worrying as many centre right voters are beginning to share those thoughts. This is such a mess that the authors of it should be made to carry the can. Let Labour win an (ever so small) majority. Oh, and Brown continues as leader.

Sir Graphus

Of course they'll print more money. To even imagine there'll be a debate is to concede that Brown, the former chancellor ever had a clue or indeed any inclination towards proper economics.

Brown is, and has always been, a cheap politician of the most opportunist variety, and not even a particularly long term thinker. He'll do what it takes to get him through the next 4 or 5 months, and hang the consequences.

Remember the phrase of the normally considered Matthew Paris "a deranged monster of a politician." Remember it always.

Occasional Ostrich

What happens when quantitative easing stops?

Silly question; why, "Quantitative Squeezing" of course. Until somebody discovers that nobody's got any 'real' money to buy the governments gilts. . .

Short the UK

Snowman,

The cost of a gilt is only so low because the BoE are a buyer, when they stop buying it will go higher, and yet higher when they go to sell the gilts they bought. Such is our dire fiscal condition that they will probably monetise the gilts.

------

At the election we have a choice:

Up the Greek: socialism (Old Labour).

Luck of the Irish: capitalism (Tories).

The more one looks at the books the better for the Tories to throw the election and let Old Labour be destroyed forever in victory. The bond vigilantes will crucify them and their cosy public sector, let them feel the pain like the private sector have these past two years. It is a disgrace that penny pinching has yet to start in Whitehall.

The basic reality: the UK public has to understand that we had hyper-inflation in the property market, this debt fuelled wealth was an illusion and that most of the GDP growth we experienced was fake. Now the bubble has popped (Bubble of Britain) we see start to see real GDP and asset prices deflate to real value, to stop this the elite have decided to print money to cover their tracks, yet they are now facing a huge black hole that reflation cannot hide. They kicked the can down the road but now they are running out of asphalt and their horrific management of the economy is being laid bare.

When will the the Cabinet, Treasury and MPC, apologise to the British people?

--

Gordon Brown - 1997 Budget:

"For most people the acquisition of a house is the biggest single investment they will make. Homeowners rightly expect their investment to be protected by sensible policies pursued by Government. I am determined that as a country we never return to the instability, speculation, and negative equity that characterised the housing market in the 1980s and 1990s.

Volatility is damaging both to the housing market and to the economy as a whole. So stability will be central to our policy to help homeowners. And we must be prepared to take the action necessary to secure it. I will not allow house prices to get out of control and put at risk the sustainability of the recovery.

I have therefore decided it is right to take two measures aimed at stability in the housing market. First I will raise stamp duty from 1 per cent to 1.5 per cent on property sales above £250,000 and to 2 per cent for property sales above £500,000. This will take immediate effect after the Budget resolution has been voted by the House.

Second, continuing the reforms begun by the previous Government which removed mortgage tax relief at the higher rate of 40 per cent in 1991, and cut it to 15 per cent by 1995, I propose to reduce mortgage tax relief by a further 5 per cent from 15 per cent to 10 per cent from April 1998.

The timing of my measure should help to avoid a return to the conditions of the 1980s where the failure to take early action guaranteed worse problems later on. I believe these measures will help to ensure a more balanced recovery."

Nick

Isn't it obvious what is going to happen?

They will cancel the debt with funny money.

They can't remove QE. It will stop the banks lending.

Cancel the debt and let interest rates rise to stiffel inflation is my prediction

Beer Moth

I..M..F

Moraymint

"If the UK reaches those levels, then the public finances would go into meltdown ..."

It will and they will.

Billericay Dave

Chris I made the post as a discussion point to see what others think. The other point is what would labour do if they do win which would probably scare the crap out of Darling and Co.

TomTom

The IMF will have to be called in at the start of a new Government to review the situation. There is no point in waiting

Moraymint

Chris lancashire
December 17th, 2009 7:39pm

... yes, I'm in that group of otherwise Conservative voters who is giving very serious consideration to voting Labour. I think we could be better off voting for a precipitous and catastrophic failure of the economy and, therefore, the rapid demise of the next (Labour) government (and, hopefully, the Labour Party).

Meantime, the Tories would have to ditch Cameron and crew and find a proper leader and top team of substance. Alternatively, Cameron and the existing team might start talking sense (I wouldn't be holding my breath on that one).

I'm in favour of rapid failure, not because I relish the circumstances: the thought horrifies me. What really horrifies me is the prospect of the prolonged agony that would be a half-arsed Tory government, drifting from one useless, focus-group led policy to the next, ratcheting their way slowly but surely down the socio-economic ladder until we end up where we would be anyway (but quicker) if we reinstate the Labour Party on the bridge.

Incidentally, it would be fun to watch the Labour Party drowning in their own sewage.

Let's be honest, the political situation in the UK is truly dire. So, let's have done with the collapse and then we can pick up ourselves up, dust ourselves off and start all over again ... just like it says in the song.

How on earth did we ever allow our political mafia to get us into this horrendous situation? That really baffles me.

Steve Tierney

A handful of people on sites like this seem aware of the situation's severity. The rest of the whole country muddle on, utterly oblivious. Weird, isn't it?

Derek

Moraymint We played by the rules.

Nick

The only reason I can see the IMF being bought in as a scapegoat for the cuts. Far better in my opinion to put blame on Labour. Have a tax to pay the debts. Needs a good name. Labour tax? Yes that will work.

The problem with the IMF, they don't have the cash. It's gone to other basket cases

wrinkled weasel

I too like Billericay Dave's "Labour Win" scenario.

It's appeal is in forcing the British Public to see the ultimate folly of Labour policies. But on balance, I'll pass. We already live in a third rate European country. Being hurtled back to the Dark Ages would be too much for me to swallow.

Tankus

@ Nick
better still ....BROWN TAX

TrevorsDen

Who said the bank of England was Independent?

The presses will continue to roll until after the election.

gareth

Moraymint, Let's vote Labour back because it's the correct thing to do. We mustn't be discriminatory, and make a value judgement - that is bigoted. Labour's narrative may be more nuanced than non-socialists could possibly know.
Ben Elton could be poet laureate, and perhaps Polly Toynbee could be brought in to bolster Harriet Harmon, in some way, that cuts to the real causes of society's ills. And they should know, they're angels.

Nicholas

Complete economic collapse under a Labour government would not bring, alas, the results that conservatives might seek. They believe it would bring retribution? This is a government (and party) of absolute dishonesty, deceit and desperation, led by a deranged and egocentric imbecile.

I would never trust them with the levers of power in even the most benign situations - but at a time of national crisis? The thinking that this would bring about their collapse and replacement by a truly conservative government with a new hawk leader is pure fantasy. They are socialists - deeply unpleasant, inbred, malevolent and scheming.

Their multitude of crimes is already being gleefully ignored, concealed or misrepresented by a bloc of left-leaning idiots in the media and public sectors. They do complete disregard for reality to the point of perfection. A crisis just gives them more opportunity to wield power recklessly and insanely. Chaos and cultural collapse is what they have planned for. It is the final stage of their stealth cultural revolution and we should all be very afraid of the consequences.

Vote for them? Never. I might be persuaded to take up arms against them though.

Dorothy Wilson

Steve Tierney is absolutely right, unfortunately. For the vast majority of the population this is totally over their heads.

Last week I was talking to a veteran Conservative local government politican. He told me that in all his years in politics he has never known a time when people are so divorced from reality.

But, as Kelvin Mackenzie pointed out when reviewing the papers on Skye earlier this week, employment in the public sector has increased by 1 million under Labour to a total of 6 million. If you work in the public sector and under Labour you get an above inflation salary increase whilst the Conservatives are implying your job may disappear who are you going to vote for?

The damage Labour may be doing to the overall economy in awarding you your pay rise doesn't really come into the equation especially if your trade union is bombarding you with anti-Conservative propaganda.

The Conservatives need to find a way of putting this over to the general population in terms they can understand. That won't be easy.

Peter

I'll get my wheelbarrow out.

Billericay Dave

Im glad I raised the discussion of letting labour clean up the mess they have caused. Interesting views, Im still not sure I could bring myself to put a cross against thier candidate on poling day it would feel like betraying my country.

Short the UK

If you want to vent some bile:

enquiries@bankofengland.co.uk

Attn: Mervyn King

oldtimer

One possible outcome for the UK would be sovereign debt default. The UK`s liabilities are probably too big for the IMF to handle. I believe that most of its resources have already been committed to support smaller countries with smaller debts.

Of course this would be extremely bad news for the 6 million employed by the state. The state would lack the funds to "guarantee" (to borrow Labours latests mot du jour) the pay, pensions, expenses and other terms and conditions which they presently enjoy.

Whichever way you look at it, the next several years are going to be a disaster. I am with Nicholas (above) on this. Whatever else you do, do not vote Brown back into power. It is already clear that they have put legislation in place to rule by ministerial fiat. So be careful what you wish for.

Michael Booth

"What happens when quantitative easing stops?"

constipation begins again...

Moraymint

oldtimer
December 18th, 2009 10:51am

Aren't we ruled by ministerial fiat already, to all intents and purposes?

It's the sense of crushing, incompetent and unchallengeable intrusion into every nook and cranny of my life by the state that so angers me these days.

I'm with Nicholas on the idea that there may well come a time over the next few years when direct action against government maladminstration and malfeasance will be the only recourse left open to the increasingly punchdrunk and robbed British citizen.

Meantime, our politicos sail on, feathering their nests, spewing out their propaganda, playing their petty political games and generally reorganising the proverbial deck chairs.

Hello! Hello! The nation's current debts and contingent liabilities together now add up to some 300% of GDP (see Wat Tyler over at Burning Our Money for the details). Is anyone planning to grip the nation's finances any time soon and avert a national catastrophe?

Dean

The premise behind this article is highly inaccurate and misleading. You imply that the MPC - an independent body established with a very clear legislative remit to control inflation - is using the 'last resort' policy tool of quantitative easing simply in order to enable the Government to maintain its borrowing levels. This is a gross travesty, as careful perusal of any recent BoE Inflation Report or Quarterly Bulletin would soon reveal.

The purpose of quantitative easing was to supplement interest rate policy (which was no longer effective due to rates having fallen to near zero) with the specific monetary policy objective of preventing a Japan-style asset price deflation, which was the most serious threat facing the economy in Q1 2008 and Q1 2009.

There is a legitimate question as to how long quantitative easing can/should continue, but it is a completely separate issue from the size of the fiscal deficit.

Unfortuntely, economic illiteracy of this kind has been characteristic of the Spectator since the onset of the credit crisis - one reason why I have stopped buying the magazine.

When are you going to get it into your heads that this was an unprecedented global financial crisis, requiring a unique set of policy responses in all major countries? It is not simply another case of a Labour Government mis-handling domestic economic policy. It is true that the UK's problems have been compounded by poor economic management by Brown in the years leading up to the crisis, but this constant misrepresentation of the problem as entirely home grown does no-one any favours. Denigrating sound policy measures that would have been taken by a Tory Government facing a similar situation is adversarial politics at its very worst.

Mark Bathgate

Dean

A few points:-

The MPC is operationally independent, but it's members are exclusively appointed by the Government of the day. This differs from other central banks where there is legislative or other oversight of the apointments process to help to ensure the integrity of the decision makers is not questioned. See the apointments process to the Federal Reserve or Bank of Canada board for an example.

A more detailed look at last inflation report - see the link embedded in the piece above - would show that one of the key means by which QE is thought to work is via lowering interest rates on Gilts. That's why chart 1.4 shows the impact of QE on lowering Gilt yields relative to where the Overnight Interest Swap market implies they should be.

Many senior central bankers in other countries are privately looking at the Bank of England's actions of the last year as an example of how not to run policy - particularly due to it's impact on the political economy through effectively monetising deficits.

You will be aware i am sure that apart from a 300billion purchase of Treasuries - equivalant to 2% of GDP - no other developed central bank has followed the Bank of England's QE approach over the past year.

Most other central banks have focussed on ensuring the transmission of official rate cuts to mortgage and corporate lending rates via use of much wider collateral eligibility and longer term repo facilities. There is no zero bound problem at present for the private sector in the UK - with mortgage rates are almost treble eurozone levels.

The view we have consistently put forward is that the UK needs very low private sector borrowing rates - which frees up cashflow to households and corporates to allow spending and saving to coexist. Every 1% of mortgage rates is 16billion extra pounds into consumer's pockets. This is what has led to recovery in most other countries globally.

The UK's approach of print and spend, with soaring bank lending margins and private sector credit costs, is now very much the outlier globally.

DavidL

Dean would have us believe it is all just a happy coincidence. The fact remains that if the Governor of the Bank of England had been trying to get away £200bn of gilts this year without a guaranteed buyer in the Bank itself he would have had a hell of a time. There would have been unsuccessful auctions and real interest rates would be substantially higher (I think at least a full percent) driving the economy further into recession. The question asked in this piece is therefore a legitimate one: what will happen when the UK markets for gilts is no longer supported in this way? I think the cost of the debt being so cavalierly acquired will increase making further cuts in expenditure necessary.
In theory the Bank is committed to reversing QE by reselling the gilts acquired into the market. This would add to the £220bn that need to be sold next year and is therefore not going to happen. I think it is optimistic to assume that we have seen the full exchange rate consequences of this.

DavidL

By the way when are you going to recalibrate your debt counter? According to the figures out today it is £100bn behind the awful reality.

Moraymint

Dean

"Denigrating sound policy measures that would have been taken by a Tory Government facing a similar situation is adversarial politics at its very worst"

Hang on a minute.

The reason that this Labour government is now deploying the economic tactics of politically self-serving, utter desperation is because the said Labour government (well, Gordon Brown to be precise) made such a total, cynical, Marxist horlicks of running the economy for the previous 12 years.

It's no good anyone making excuses for the state we're in. There's absolutely no question that of virtually every developed and half-developed nation on earth, the UK is one of the worst - if not THE worst - placed to dig itself out of Brown's catastrophic mismanagement of the economy.

So please let's not fall victim to Brown's propaganda that this is a global crisis of American sub-prime making and that were it in not for Brown himself, our nation would be in a real mess.

Hey - we're in a real mess. Hence the frantic pulling of levers happening now. It's a moot point whether a government of some other persuasion would have ever mismanaged the economy to the breathtaking degree of incompetence displayed by Gordon Brown.

Luck of the Irish

Copied from Money Week, well worth a subscription:

Ireland gives the world a lesson in economics By Matthew Lynn Dec 18, 2009

"What's the difference between Iceland and Ireland? One letter, and about six months." That was the big joke around the City a few months back.

Last week, it seemed as if the cruel jibe had more than a touch of truth to it. Ireland, the Celtic Tiger that for the last decade had been on a giddy ascent to the top of the global prosperity leagues, has come crashing down to earth. With its banks turned to toast in the credit crunch, and property prices in freefall, the government has been forced to introduce one of the most savage budgets seen anywhere in the developed world. It included cuts of at least 10% in the pay of all public-sector workers, and reduced welfare benefits.

Yet almost alone in the developed world, the Irish government has crafted the right response to the credit crunch. It has allowed house prices to fall drastically, cut back a bloated state, and kept taxes low and steady. It is, in short, pushing for an enterprise recovery, accepting short-term pain in exchange for medium-term gain. Over the next decade, the Celtic Tiger will come roaring back. And it will give the rest of the world – particularly its larger neighbour on the other side of the Irish Sea – another lesson in how to run a modern, flexible, business-friendly economy successfully.

Ireland has certainly learnt the meaning of the phrase 'boom and bust'. Over the last 30 years, it has transformed itself from a relatively poor backwater into one of the world's most dynamic economies. During the 1990s, it regularly clocked up annual growth rates of close on 10% a year. Irish companies such as Ryanair expanded around the world. Migrants, once an Irish export, became an import instead, as eastern Europeans flocked to Dublin in even greater numbers than they did to London. By 2005, the Organisation for Economic Co-operation and Development ranked Ireland as one of the five wealthiest nations in the world, alongside America, Switzerland, Norway and Luxembourg. That's a remarkable achievement, given that it is neither a global super-power, nor a tax haven, nor is it sitting on oil wells.

The British tended to be snooty about Ireland's achievement, assuming it was riding on a tide of EU subsidies. But so was Portugal, and indeed France, and they weren't nearly as rich. In fact, the Irish had done it their own way, with low corporate taxes and a state that was one of the smallest in the developed world.

The credit crunch hit Ireland hard. Its banks were wildly over-extended, particularly in the British buy-to-let and self-certification markets. In the last few months, the extent of the recession has become plain. The economy shrank by 7.5% this year and is forecast to contract by another 1.25% in 2010. House prices are 45% below their 2007 peak, and are still falling. Unemployment is rising. The banks have had to be bailed out.

But just look at the response. Britain, along with many other countries, is racking up huge debts, printing money like crazy, and raising taxes. Ireland, just as it did 30 years ago, is taking a very different path. As a member of the euro, it doesn't have the luxury of devaluing its currency. Nor can it just print money. Only the European Central Bank can do that. So it had to put its own house in order. Last week's budget set out plans to cut the deficit from more than 11% of GDP now to less than 3% of GDP by 2014. Public-sector pay is to be cut by 5% and cabinet ministers will see their salaries fall by at least 15%. Welfare payments for the unemployed were reduced, along with child benefit. Just as importantly, the government took the pain on the spending side of the balance sheet, refusing to raise taxes overall. Crucially, the 12.5% corporation tax rate that has made Ireland a magnet for foreign investment remains in place.

There is no doubt that a tough couple of years lie ahead. The budget cuts won't turn the economy around anytime soon. There won't be any lift from the housing market, nor will there be a sudden boom in speculative bank lending. There will be a lot of knuckling down and hard work.

But lift your eyes to the medium-term horizon and the outlook is surprisingly good. By 2012, Ireland will have its budget deficit under control. House prices will be back to levels where people can actually afford to buy. It will not be threatened by constantly rising taxes. It will have a strong currency, not threatened by constant devaluation, or vulnerable to speculative attacks in the markets. And it will have some of the lowest tax rates in Europe, along with the certainty that there will be no real need for the government to raise taxes in the future. And it will still have one of the youngest, best-educated, English-speaking workforces in the developed world. That's a pretty good mix.

In effect, Ireland is taking the pain in one short blast. It is purging the excesses of the bubble, and putting its economy on a sounder footing. It will work. The Celtic Tiger will be back. The policies it is pushing through now will lay the basis for a strong recovery in the next decade, just as much of the rest of the world is scratching its head and wondering why the strategy of piling debt upon debt isn't working. Not for the first time, the Irish will have given the rest of the world a lesson in sound economics.

Short the UK

It makes me weep when I look at the insane policies our elite are taking. The BoE has let the country down by financing Old Labour's fiscal madness. The "blame it on the bankers" smokescreen is pathetic but what does one expect from such nincompoops!

I see today that Martin Wolf in the FT (F****** Terrible) still clings to Mr Brown, in particular I hold the FT to savage criticism as they supported New Labour all the way in the Bubble of Britain, even now as we face fiscal ruin they can't repent and apologise, they should be gettting stuck into Old Labour like the country's future depended on it, instead they prevaricate. I am incensed!!!

Up the Greek

Clusterstock - 16/12/09:

"In this morning's Gartman Letter, analyst Dennis Gartman addresses the ongoing fiscal crisis that revolves around Greece:

The Gartman Letter:

Moving to Europe, Greece is in trouble and the speech made yesterday by the rather overtly leftward leaning Prime Minister, Mr. Papandreou, was disconcerting to say the very least. At every turn, when the Prime Minister might have drifted toward the economic centre, he drifted farther and farther to the Left instead. Where Ireland seems intent upon dealing properly with its budgetary problems by cutting spending materially and raising taxes marginally, Greece instead is cutting spending hardly at all and is raising taxes almost solely upon the nation’s wealthy to confiscatory levels. This really is utter economic nonsense.

Speaking to the Parliament, Mr.Papandreou … whose family has literally “run” Greece as a fiefdom any number of times in the past…said that there shall be resistance to what he has called "tough and painful measures" to restore Greece’ position within the EU but he insisted the country's international credibility depended on it. He said, unleashing a tirade of leftward leaning ideas,

There is pressure from our European partners, which is an opportunity for us to tackle problems that have been festering for decades…We are a government of reform, not a government that manages the status quo…We need to take tough and painful decisions, which will face opposition, but we will bring meritocracy and restore credibility.

The problem is that most of his program resolves around raising taxes on Greek wealth and Greek entrepreneurs. His program will play well to the public; it will play havoc with the Greek economy however {Ed. Note: Prime Minister Papandreou is the President of the Socialist International, and has been since ’06. His father was Prime Minister as was his grandfather, and they too were ranking members of the Socialist International for many years."

Paul B

The (in)famous Verity sometimes of this Parish has been saying for years (to her credit) that what she wants is a narrow Labour victory (overall majority)at the next general, so that when the day of reckoning comes, Labour and Socialism crashes and burns in this country, with a Conservative Party with a new and more robust leader than DC stepping into the breach to sort the devastation out. Suddenly I wouldn`t bet against her forecast coming true.

Verity, apologies if I have got any of your ideas wrong.

The idea is starting to appeal to me, with a group forming around Farage, Carswell & Hannon. That would be a formidable trio if egos could be put aside , which is always difficult

Moraymint

Paul B
December 18th, 2009 4:30pm

I've been posting in similar vein for some time too.

Paul B

Moraymint, then I`m happy to credit you for your foresight as well Sir.

Stephen Lord

The MPC has done everything to accommodate the government's wishes, I would say at the expense of the economy - have they been nobbled?

Peter L. Griffiths

Quantitative easing means the central bank handing over new notes to the other banks instead of injecting them into the economy. This does nothing to solve the main problem confronting the banks namely defaulting debtors.