Sunday, August 9, 2009
David Smith turns bearish?
The decision to announce an additional Â£50 billion of asset purchases came as a big surprise to the markets. I have to say that, armed with the publicly available information on Thursday morning, I would not have done it. I can see the argument for a degree of overkill. I share with Sushil Wadhwani, a former MPC member, a slight sense of unease. The Bank has expanded its balance sheet enormously, giving it a potential exit-strategy headache when the time comes. You expect central bankers to be cautious about this kind of thing. Thursdayâ€™s decision was not cautious.