Desperate Times and desperate measures. The Bank of England has been listening to Morticia and is to start printing money again ("quantitative easing").

With average EU inflation at 3% and rising, will QE stoke inflation further, or can it help the UK keep ticking over ? Should the Eurozone be doing the same ?


The Bank of England injected a further £75bn (€86bn) into the UK economy today in a bid to jump-start its flagging recovery.

Its Monetary Policy Committee (MPC) voted to boost its quantitative easing (QE) programme – effectively printing more cash – from £200bn to £275bn despite the risks it poses to the country’s inflation rate.

Meanwhile, it maintained interest rates at 0.5%.

The move – the first change to QE since November 2009 – offers the clearest signal yet that the Bank thinks Britain is on the brink of a double-dip recession.

The Bank of England said it boosted QE because ``tensions in the world economy threaten the UK recovery'' and the slack in the economy is likely to be ``greater and more persistent than previously expected''.

The decision was welcomed by business leaders who have called for help to stimulate the economy after figures revealed that Britain suffered a deeper recession and is recovering more slowly than first thought.

A report by the Bank into the effect of QE on the economy previously found that the stimulus measure provided a “significant” benefit to growth and helped GDP increase by around 1.5% and 2%. This was equivalent to dropping interest rates by between 1.5% and 3%, the Bank found.
Read more: http://www.breakingnews.ie/business/...#ixzz1a079R1WX