£75bn more quantitative easing announced by Sir Mervyn King to boost demand in economy
The Bank's governor said the UK was suffering from a 1930s-style shortage of money and needed a second dose of quantitative easing to boost demand and prevent inflation falling too low.
"Given evidence of continued impairment in the flow of credit to some parts of the real economy, notably small and medium-sized businesses, the Treasury is exploring further policy options," Osborne said in a letter to the governor. "Such interventions should complement the monetary policy committee's [MPC] asset purchases."
Britain's first dose of quantitative easing, also known as QE1, was in 2009/10, with £200bn being injected into the economy. Labour said the launch of QE2 was an admission that the government's economic policy had failed.
"The pace of global expansion has slackened, especially in the United Kingdom's main export markets," the MPC said in a statement explaining its decision. "Vulnerabilities associated with the indebtedness of some euro-area sovereigns and banks have resulted in severe strains in bank funding markets and financial markets more generally. These tensions in the world economy threaten the UK recovery."
http://www.guardian.co.uk/business/2011/oct/06/britain-financial-crisis-quantitative-easing
The Bank's governor said the UK was suffering from a 1930s-style shortage of money and needed a second dose of quantitative easing to boost demand and prevent inflation falling too low.
"Given evidence of continued impairment in the flow of credit to some parts of the real economy, notably small and medium-sized businesses, the Treasury is exploring further policy options," Osborne said in a letter to the governor. "Such interventions should complement the monetary policy committee's [MPC] asset purchases."
Britain's first dose of quantitative easing, also known as QE1, was in 2009/10, with £200bn being injected into the economy. Labour said the launch of QE2 was an admission that the government's economic policy had failed.
"The pace of global expansion has slackened, especially in the United Kingdom's main export markets," the MPC said in a statement explaining its decision. "Vulnerabilities associated with the indebtedness of some euro-area sovereigns and banks have resulted in severe strains in bank funding markets and financial markets more generally. These tensions in the world economy threaten the UK recovery."
http://www.guardian.co.uk/business/2011/oct/06/britain-financial-crisis-quantitative-easing
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