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Boe In Money Printing V Rate Rise Debate

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BoE in money printing v rate rise debate

By Dan Atkinson

3 October 2010, 9:48am

The Bank of England's Monetary Policy Committee faces its most divided meeting this week.

The argument continues with Posen (why do we have an American citizen sitting on the MPC who will not face any inflationary consequences

shall his print more money tactics back fire?) favouring printing more money.

Andrew is going to go for a hike again.

The rest are favouring on hold I think.

Also, quoted from David Smith Sunday Times blog:

But if the supply-side of the economy has been damaged, all that pumping will not drive it faster. The drivers of economic growth are fundamental. Pumping money into an economy in these circumstances could lead to sustained high inflation. Weak growth and high inflation can co-exist. Posen has provided an alternative view but it is also a stab in the dark. To use it to extend the Bank’e easing policy would be a mistake, possibly a dangerous one.

Meaning - what if the QE does not allow shutted factory, closed shops to be reopen and developers come out to build more houses, we have a problem.

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I don't know if this sheds any more light on the subject?


There was alot of speculation recently about the BoE 'losing credibility'; they don't seem to be moving in any particular direction with confidence. The comments below this article make that point.

What do people think this means for house prices? Are we going to see another dead cat bounce?

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