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Why should UK consumers suffer quantitative easing?

As the Bank of England sits on the verge of introducing one of the more radical economic policies available, i.e. quantitative easing, there are serious concerns that again UK consumers are set to foot the bill of the "mismanagement of the economy". In effect the imminent arrival of quantitative easing will see the Bank of England investing billions upon billions of pounds to acquire assets from the government (in the form of bonds) and potentially unwanted assets from the financial sector.

Make no mistake, quantitative easing is a way for governments and companies to raise funds by selling assets which traditional investors have very little appetite for at this moment in time. The hope is that as assets are swapped for billions upon billions of pounds from the Bank of England these companies and the government will pour this new liquidity back into the economy which will then increase credit lines and hopefully restart economic growth in the UK.

Once quantitative easing has been brought into play it is simply a case of the Bank of England investing money until the UK economy turns around and it can begin to stand on its own two feet again. This could last for six months, one year, two years, five years or a decade as the UK struggles to escape the clutches of deflation and a potential depression. This is the real business end of the task of reviving the UK economy!

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