Sunday, March 1, 2009
Endgame for savers
The Bank of England is set to bring interest rates down to an effective zero-level within days and to sound the starting pistol on quantitative easing, pumping extra cash into the economy. The Government is putting the finishing touches to a letter to the Bank endorsing its proposal to embark on this radical policy. The Bank's governor, Mervyn King, will be granted approval by the Treasury within days to create up to 150bn in new money in the coming months to buy up everything from corporate bonds to government debt. It will pave the way for the Bank's Monetary Policy Committee effectively to "start the presses" at its interest rate setting meeting this Thursday.