MPC committee vote in favour of quantitative easing
The minutes for the recent Bank of England monetary policy committee meeting have been released today and show that all members of the committee are in favour of commencing quantitative easing as soon as possible. There was also concern in the minutes that the committee has been "slow" in reducing interest rates in the UK over these troubled times which has led to a run on sterling today.
It would appear from the minutes that UK base rates are certain to fall at next month's meeting and are likely to approach 0% in the short term. The move towards quantitative easing is literally the last chance saloon for the UK authorities which will allow them to "print money" in order to fund future investment in a recovery in the UK economy. As yet there has been no confirmation from the government that quantitative easing will begin in the short term but speculation has been growing over the last few weeks.
A move towards quantitative easing is sure to attract criticism from all opposition parties and the UK taxpayer in general. It is in effect an admission that the rescue packages which have cost billions and billions of pounds have not worked and are unlikely to make a difference in the short term.
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