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"credit" Easing A Last Resort - Bank's Posen

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The Bank of England might aim to cut borrowing costs in specific areas of the economy should its program of buying government securities prove ineffective in stimulating economic growth, Bank Monetary Policy Committee member Adam Posen said on Thursday.

The Bank of England's next step, if necessary, would be to shift into "heavy-duty credit easing," Posen said, which he defined as targeting specific sectors such as the United States did with housing markets.

The Bank of England, like the U.S. Federal Reserve has embarked on substantial purchases of securities to boost growth after having lowered benchmark interest rates to very low levels.

However, after central bankers in the United States provided $1.7 billion (1.08 billion pounds) towards the effort and 200 billion pounds in Britain, further quantitative easing may see diminishing returns in stimulating growth.

Posen played down the usefulness of having the Fed target the yield on the ten-year Treasury note as a possible next page in its playbook.

U.S. officials are contemplating further quantitative easing if the economic outlook darkens, but policymakers may eventually need to find other tools.

Speaking about above-target inflation in Britain, Posen said that to the degree inflation can be explained as being due to a shock, policymakers have some latitude in their response.

If policymakers can credibly say inflation is not being passed through to general rises in inflation, the bank need not overreact, he said.

British inflation was 3.1 percent in July, well above the central bank's 2 percent target, but the Bank said last month this was mostly due to temporary factors while future growth was likely to weaken, making rate rises inappropriate for now.

They are still trying to pump up the economy with debt. Clearly debt has been the driving force of the Western economies and we must all take on more debt at any cost to rescue the economy and the recovery.

House prices must be supported at all costs? If wages don't increase the only way people can take on more debt is if the interest rate is near 0% for them, however you are then locked into low rates for the life time of the loan and of course low rates will increase speculation.

Nice to know our policy makers aren't total idiots...

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There will be no real economy left when they have finished. This is merely a continuation of the failed policy that created this mess - serial bubble blowing creating utterly artifiial GDP "growth", malinvestment, little real investment leading to accumulative failure in the the ability of the real economy to operate from an inflated cost base. All this "policy makers inthe 30's failed becuasse they did not do enough" is an utterly specious argument, the mess would have been bigger.

These money meddling lunatics have never done a productive day's work in their life, they understand nothing about operating comeptitively in a local or world market, their fois gras econmics are going to stuff the economy until it is dead.

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  • 429 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

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