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Bank of England poised to restart QE stimulus

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    Bank of England poised to restart QE stimulus

    From our own correspondent Sir Merv:



    The Bank's Monetary Policy Committee is expected to say it will spend a further £50bn on asset purchases when it reveals its monthly policy decision at noon. (AtW's comment: what exactly those assets are? Gold? Infrastructure? Shares in good companies? Or Govt bonds that Govt can't sell without increasing interest rate to Greece levels? )

    It would take the total spent on QE to £325bn, since the beginning of the programme in March 2009. The MPC is expected to leave interest rates unchanged at 0.5pc.

    Although there will be little explanation of today's decision until the minutes of the meeting are published in a fortnight, the MPC is likely to justify any increase in QE against a backdrop of falling inflation, a weak economy and uncertain outlook. (AtW's comment: )

    There have been a number of upbeat UK economic indicators for January in recent days, but the economy contracted by 0.2pc in the fourth quarter according to official data and the prospect of a return to recession hangs in the balance.

    "More QE by the Bank of England is still odds-on, despite overall survey evidence that suggests that the UK economy enjoyed some pick-up in activity in January," said Howard Archer, chief UK economist at IHS Global Insight.

    Alan Clarke, economist at Scotiabank, said that positive surveys from the manufacturing, services, and construction sectors had "put the cat amongst the pigeons" ahead of the MPC decision – which had been considered a certainty – but still forecast a £50bn increase today.

    Mr Clarke said: "The Bank of England will feel vindicated that extraordinary monetary policy easing, both here and by the ECB, is having the desired effect on growth. Stronger growth prospects are exactly what the Bank wanted to see, so should not be discouraged by this." (AtW's comment: the economy has shrunk and he says this is BoE having desired effect on growth? )

    While economists agreed that an expansion of QE was the most likely outcome of today's meeting, some argued a unanimous decision was less likely in light of the stronger than expected January data.

    David Miles and Adam Posen, both enthusiastic backers of QE, have made comments suggesting support for more stimulus at this stage is not a certainty among the committee as a whole.

    The MPC will have had chance over the course of its two-day meeting to consider the Bank's latest forecasts for growth and inflation, which will be made public when the Bank's February Inflation Report is published next week. They will ponder whether inflation still looks set to fall as sharply as the Bank predicted at the time of the last Inflation Report in November.

    "The sheer size of the inflation target undershoot that was projected in November means we continue to expect a QE expansion this week – there has not been anywhere near enough positive news on the economy to close the projected gap, in our view," said Simon Hayes, economist at Barclays Capital.


    Source: Bank of England poised to restart QE stimulus - Telegraph

    FFS £325bn printed in just 3 years - that's 10 High Speed 2 lines only without creating any jobs and infrastructure!



    Sir Merv: I wish we started printing money earlier!
    Last edited by AtW; 8 February 2012, 21:35.

    #2
    printy printy... its only thing Merv knows.

    Comment


      #3
      Money isn't worth the paper it's printed on.

      Still, should keep property prices out of the reaches of Russian immigrants.

      Comment


        #4
        Something for the next government to deal with.

        Comment


          #5
          Originally posted by DimPrawn View Post
          Still, should keep property prices out of the reaches of Russian immigrants.
          Only from reaches of poor Russian immigrants.

          Comment


            #6
            To quote a comment

            The Bank Of England is a crime gang who have stolen trillions from the British public through inflation on behalf of their member banks/cartel/mafia, the bank is directly stealing from savers through the low interest rates, that only benefit speculators, the losers who caused the crisis in the first place.
            The Euro zone cannot act quickly enough to ring fence itself from speculators with a tobin tax.

            Did wonder why the euro gained a cent on the pound today, the race to the bottom just stepped up a gear.

            Do black holes have a bottom?
            "Never argue with stupid people, they will drag you down to their level and beat you with experience". Mark Twain

            Comment


              #7
              Have you downgraded your expectations of a 997 Turbo to an Audi?

              Comment


                #8
                Originally posted by DimPrawn View Post
                Have you downgraded your expectations of a 997 Turbo to an Audi?
                Can't put my new number plate on non-2012 car

                Comment


                  #9
                  Seems Merv will do ANYTHING to avoid deflation. And has underestimated inflation for years. Anyone can do that - its a muppet's job. This is storing up alot of trouble for the future.

                  Comment


                    #10
                    So the BofE has only "done" QE to the tune of £325 billion?
                    That's a lot less than Super Mario has recently done at the ECB, with his "back door"* QE.

                    Eurozone Crisis: ECB's 'Back Door Quantitative Easing' Lifts Markets

                    So what are you cretins moaning at?

                    *Typical of continentals that they do QE through the tradesmens entrance.
                    Hard Brexit now!
                    #prayfornodeal

                    Comment

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