Sunday, Nov 01, 2009

Could it be any clearer?

The Times: Bank of England should release £30bn more in quantitative easing

David Miles, who joined in June, said recently: “I believe the evidence is that QE is having an impact and that it is relevant to economic conditions right across the country. And not just in financial markets in London, but in high streets and factories and homes throughout the UK.”
Kate Barker, another MPC member, said a few days ago that it had helped ease the recession in the housing market, thus supporting house prices.

Posted by devo @ 11:10 AM (2544 views)
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1. devo said...

A reader writes:

it is unethical that careful savers are being forced to bail out reckless borrowers and greedy gambling banks. Many savers are calling for a "savers strike". So far savers have taken the pain of having their income cut by 75% very quietly. To put pressure on government simply move any savings from RBS/Nat West and Lloyds to another bank. If at least 25% of savings are removed from these banks in the next week, then government will be forced to take savers seriously and stop stealing their money to give to reckless borrowers and greedy bankers. Move your money this week, it's really easy and doesn't need to cost you a penny as there are better rates elsewhere

Sunday, November 1, 2009 11:13AM Report Comment

2. fallingbuzzard said...

I think that only works when you put the money under your mattress and the BOE winds down the special liquidity scheme, i.e. never!

Sunday, November 1, 2009 11:39AM Report Comment

3. letthemfall said...

I thought this was an interesting quote: "Kate Barker, another MPC member, said a few days ago that it had helped ease the recession in the housing market, thus supporting house prices."

The idea of Eastender watchers discussing QE is a good one. Perhaps they should weave the topic into the story: " 'ere, whadju fink of this 'ere quan'ita'ive easin'." "Cobblers mate. "

Sunday, November 1, 2009 11:47AM Report Comment

4. peter_2008 said...

The intention of QE is not about helping economy. It is about defaulting on debt in a quite and organised manner through inflation.

In that sense, it has been very successful, because the creditors have no choice. The alternative is for UK to default on its debt outright and creditors would loose most lended money.

Things will get very tricky now. UK is the only major economy still in recession. So there are alternatives. The creditors don't have to stick with the UK. They can put money on the ones have already recovered. On the top of that, if UK is not showing any sign of actually paying back its debt instead of printing funny money, credit will dry up very quickly.

Sunday, November 1, 2009 12:08PM Report Comment

5. krustyatemyhamster said...

So Kate, you wrote a report stating that the government needs to set goals for improving market affordability and to achieve the goals by building lots more houses. Yet here we have you stating that you think QE's a good idea because it keeps house prices up.

I have your name in my notebook and you'll be first against the wall dear.

Sunday, November 1, 2009 12:10PM Report Comment

6. stillthinking said...

UK savers look at low interest rates and see that as the unfair price of the governments actions, but the reality is much worse, the government has effectively spent the savers money and the only reason this is not apparent to all is because the savers are still attempting to "save". when they attempt to spend their paper they will find out they have been royally f*cked.

Sunday, November 1, 2009 01:06PM Report Comment

7. a saver said...

"Kate Barker, another MPC member, said a few days ago that it had helped ease the recession in the housing market, thus supporting house prices."
OUTRAGEOUS that anyone should think this was a good outcome, making it more expensive for people to put a roof over their heads, at the expense of savers, pensioners and future generations. Wonder how many properties she owns?
To think that our taxes are paying "experts"like her to manipulate the market and stuff things up.

Sunday, November 1, 2009 01:36PM Report Comment

8. quiet guy said...

Great find, Devo, and no, it couldn't be much clearer. Barker has openly declaring hostilities on savers. I've already moved most of my savings away from the banks you've listed or out of the banking system altogether.

"It is of intense importance in the City, where the programme of asset purchases is seen to have helped lift markets (which the Bank acknowledges and welcomes). A halt would bring an immediate adverse reaction, most notably by pushing up the yields on gilts and corporate bonds. It is also very important, if Miles and Barker are right, in high streets, factories, estate agents and homes up and down the country."

At last. A MSM article (from The Times of all places) that openly acknowledges we have a funny money economy.

"It is too soon to stop the asset purchases altogether, not least because of the adverse reaction in markets that would result."

Will we keep on printing until we are forced to stop? That will be 'interesting' to watch.

I like some of the scathing comments on the article as well.

Sunday, November 1, 2009 02:25PM Report Comment

9. crunchy said...

Can sheeple power work in reverse mode? One hopes.

Sunday, November 1, 2009 02:58PM Report Comment

10. paul said...

Well, firstly, this is David Smith. That in itself is enough for most sensible people to click the back button.

But the real issue is that the mainstream media does not share Noshbag Smith's appetite for moneyprinting (and the only difference is that the button is on an electronic terminal, not on a printing press. It's still printing money).

We have an odd situation where the Bank of England is building another QE wall of free money to throw at the banksters. When news of Christmas bonuses start pouring in from these taxpayer-funded failed institutions paying themselves bumper bonuses, watch the change in public sentiment change from jealousy to resentment to anger to outright public unrest.

QE is a scorched earth policy measure for future generations.

Sunday, November 1, 2009 03:21PM Report Comment

11. Smokey said...

When QE is directed at keeping assets inflated, and not at production, it only delays the inevitable effects of a recession. Effects which most countries have already got behind them. We are compouding the effects of this downturn by prolonging it.

Sunday, November 1, 2009 03:21PM Report Comment

12. flashman said...

"It is of intense importance in the City"

This is a bare faced lie. I work in the city and I couldn't give a toss about QE. In fact, I hardly ever come across anyone who cares about QE. It very rarely comes up in conversation. Most people in the city derive their income from large domestic and international companies. QE has no bearing on this business. Maybe a few people earn from it but they must be a very small minority

An earlier post quoted some tart at the BOE as saying that "it had helped ease the recession in the housing market, thus supporting house prices." I noticed that she didn't actually say how QE had accomplished this incredible feat (in addition to somehow being of intense importance to the city). QE certainly hasn’t done much to increase mortgage lending and it is therefore a stretch to claim that their ridiculous QE policy has saved the housing market. Interest rates are low worldwide, including countries without QE, so even the claim that QE has saved housing by causing low interest rates is a bit dubious.

This is a sales pitch, pure and simple. She knows that most of the population want higher house prices so she is telling them that QE has delivered this

The government wants to spend more money to stimulate the economy. QE can help them do this. QE is a very unpopular concept so they are spinning spurious advantages to groups other than themselves. The only reason we might have more QE is because the government wants to spend more money and because a cabal of economists want to try out a few academic theories. Roger Bootle is one of them

Sunday, November 1, 2009 03:41PM Report Comment

13. goweresque said...

QE doesn't directly affect the housing market, or the credit markets. What it does do is allow the govt to spend money it doesn't have, and couldn't raise on the markets on its own. Thus the spending cuts and tax rises that are inevitable to rebalance the UK budget are postponed, meaning more govt employees are still in work, people have more money in their pockets through lower interest rates (if you are a borrower anyway), and the consumer economy merry-go-round is kept spinning for a while longer. This trickles through into more interest in house purchases, and thus stabilised house prices.

If QE ends, the govt will have to raise all its funds from the market place, meaning spending cuts & tax rises (to show the bond market it means business about cutting the deficit) and rate rises (to attract foreign investors to buy UK gilts). This will crush any supposed 'recovery' in the economy. More unemployment and higher taxes = less money in people's pockets to spend. Less spending = lower GDP. If the pound starts to fall, they will have to raise rates even more to defend it - they cannot allow it to fall too far as that will spook foreign bond buyers too.

All this means that no one will want to end QE because the consequences will be so tough. And the longer you continue QE the worse the consequences get. We are trapped in a spiral that has 2 exits - hyperinflation (if QE continues ad infinitum) or deflationary depression (if QE ends). Take your pick.

Sunday, November 1, 2009 04:25PM Report Comment

14. crunchy said...

Let's clear this up. Can anyone spot how the banks are getting an inflow of money.

I could scream at you sometimes flash. lol

Sunday, November 1, 2009 04:31PM Report Comment

15. mark wadsworth said...

What Krustyatmyhamster says.

Kate Barker highlights yet another inherent contradiction in Home-Owner-Ist thinking, OT1H, they say home ownership is A Good Thing and to be encouraged (i.e. be enabling more people to buy homes, which must mean building more = make them cheaper). OTOH, Home-Owner-ists want house prices to rise for ever, which means making them more expensive.

To be fair, the Barker Review on planning restrictions etc of a few years ago was full of good stuff, she just ended up drawing the conclusions that the government wanted her to draw, what a coincidence, eh?

There were bits in it where she said that maybe Land Value Tax was part of the solution (the same as in the Burt Report on local govt finance in Scotland or the Lyons Report for E&W), but then they remember that if they want to get another handsomely paid job on some other quango, they can't recommend anything that might lose the Home-Owner-Ist vote and come up with some stupid argument why such a tax shouldn't be introduced.

Sunday, November 1, 2009 04:36PM Report Comment

16. mark wadsworth said...

@ Crunchy, Flashman is right, QE is smoke and mirrors stuff and does generate small profits for banks (because of how it is done) but has little impact in the grander scheme, maybe the banks have creamed off £2 billion or £3 billion out of that £175 billion, but the rest is just numbers on bits of paper going round in ever decreasing circles.

To sum up that video for those who haven't got 7 minutes to spare:

1. he says that QE is supposed to encourage banks to lend to each other. Hmm. maybe it does, but taking 'the banks' as a closed system, how does that encourage banks to lend to households and businesses? It doesn't.
2. he says you can't have a base rate that is negative. As a matter of fact you can, any fule kno that.
3. He says that banks can get money at very cheap rates as a result of low base rate. This is nonsense. The base rate is the rate that the central banks PAYS banks, and not what it CHARGES THEM.
4. He says that low interest rates encourage banks to lend. Wrong yet again. Banks are middlemen, they don't have any money, they borrow from savers and lend to borrowers. Low interest rates discourage people from saving in the same measure as it encourages people to borrow. Either way, low rates do not increase borrowers' credit-worthiness, which is the real issue here (he mentions that himself at 3 minutes 20 seconds in).
5. he then says that banks won't lend to ordinary companies in the street like General Electric. General Electric is, to all intents and purposes a bank!
6. he then makes sense for a minute or so, and then says that the US Fed is buying up "toxic assets" from banks. This may well be true in the US, but in the UK 99% of that £175 billion was spent on buying UK gilts from banks, who have then cheerfully left that money on deposit with the Bank of England. So it's just a huge bookeeping entry in the UK.

At this stage I decided the video was a crock of sht and stopped watching. The rest is no doubt the same bundle of half-understood half-truths.

Sunday, November 1, 2009 04:54PM Report Comment

17. crunchy said...

15. mark wadsworth

That was not the point I wanted to make. The other day we had a long thread where QE came up, flash and yourself said QE has not held

up house prices and is a minor thing. I made the point that QE has held up house prices, because the Centrals have swapped the banks

toxic assets (losses) with printed money, thus allowing the banks to freeze property lending, hoard, or invest in less risky ventures.

If one, in effect freezes a market it remains near static with regards to market value flow. I would go one step further and say that QE is

destructive in a sense because it is fuelling less riskier markets. QE should therefor be given on a strict proviso. I know that's not

free market but it's the lesser of two evils. I know there are other spin offs to this but that's how I see the QE effect.

Sunday, November 1, 2009 05:25PM Report Comment

18. crunchy said...

15. mark wadsworth

So the taxpayer does not owe a bean then GiOOUUD!

Sunday, November 1, 2009 05:46PM Report Comment

19. flashman said...

I didn't manage to get through as much of the video as Mark. I'm afraid the chap does not really understand his subject

The 3 main factors that have held up house prices;

1.The majority of the population remain utterly fixated on property and still have a religion like 'faith' in home ownership
2.Most people still have a job, so they can still afford a mortgage
3.Interest rates are very low, so they can easily afford a mortgage

Sunday, November 1, 2009 05:48PM Report Comment

20. crunchy said...

15. mark

You can't con a conner mate!

Sunday, November 1, 2009 05:53PM Report Comment

21. bellwether said...

There have been enough job losses in banking construction retails and the legal profession to tip housing .

We are not tipping because there is no liquidation cf US. The government are paying for mortgage payers that can't meet for 2 years now and that will be extended as an election platform, and banks are under orders to use repossesion as an absolute last resort, and not even then.

The long term effect of trying to maintain house prices at all costs will be a currency collapse. Might take a while.

Sunday, November 1, 2009 06:09PM Report Comment

22. bellwether said...

What I'm saying is that if we refuse a HPC and a Commercial Real Estate C then our currency will be toast in the long term. Anyone who is waiting for house prices to collapse in the UK might be better getting out of sterling and waiting until it collapses.

Then again there might be no option but a currency collapse, UK banks are stuffed full mispriced assets. The usual way out of this is to liquidate and achieve price discovery and move on from a lower base. Problem now is that if we try to liquidate some assets the market will fall and all the others assets will plunge below book value and destroy the mirage that we think of as capital base.

This is an extrordinary situation and there is no obvious way out of it.

Sunday, November 1, 2009 06:16PM Report Comment

23. crunchy said...

Thanks bellwether.

Sunday, November 1, 2009 06:29PM Report Comment

24. devo said...

11. flashman said... I work in the city and I couldn't give a toss about QE.


Probably the most extraordinary 'initiative' in British economic history and it isn't important to you, an economist.


Sunday, November 1, 2009 06:35PM Report Comment

25. flashman said...

"There have been enough job losses in banking construction retails and the legal profession to tip housing"

Unemployment is lower than in previous recessions. Some of these recessions were associated with lesser house price falls than we have already experienced, so I don't see how you can say that there have been 'enough'.

Sunday, November 1, 2009 06:42PM Report Comment

26. icarus said...

QE artificially buys notes and bonds, just as the Chinese do when they hold down their exchange rate. It increases the money supply, keeps interest rates down and supports asset prices and markets - shares, bonds, property. When David Smith says QE is of intense interest to the City I imagine this is what he's thinking.

Sunday, November 1, 2009 06:59PM Report Comment

27. flashman said...

icarus: There are many types of QE and it does not necessarily do any of those things (except for the buying part in our case). The Chinese do something quite different. In any case, saying that it is of intense interest to the city is wildly inaccurate. It does not affect most of us.

Sunday, November 1, 2009 07:14PM Report Comment

28. flashman said...

devo: People often think that they live in a unique time. There have been many more serious crises in our history and there have been many more significant economic initiatives than the current QE.

You actually quoted me out of context but then you knew that. I realise that your frustration causes you to attack the nearest city worker and I am glad to be of service (genuinely) . It costs me nothing and it gives you an outlet. I am always quite tickled when I see a headline that you have altered to include my name or a fantasy picture of me sipping champers. Good stuff

Sunday, November 1, 2009 07:23PM Report Comment

29. Crunchy said...

The biggest crash ever and flash said... "There have been many more serious crises in our history and there have been many more

significant economic initiatives than the current QE." Not on finance flash.

Flash my head is spinning with all these fu........zeros. You have always imprest me, but I think on this one the midas touch is slipping.

No offense meant.

Sunday, November 1, 2009 07:39PM Report Comment

30. flashman said...

Regarding the banks being stuffed full of mispriced assets. Some of them have actually deliberately overdone the the marking down of their assets and some of then don't have any significant mispriced assets remaining on their books. Not all banks are the same. Barclays, HSBC and several of the larger private concerns certainly do not fall into this category. Even if all banks were stuffed with mispriced assets, it is a bit of a wild leap to claim that our currency would collapse (a little more explanation is required in that the currency mechanisms are rather more complex that this statement implies).

Even if it was the case that a significant number of UK banks were stuffed with mispriced assets, it is likely that Japanese, European and American banks would also be stuffed full of mispriced assets. We can't all collapse our currency at the same time.

Sunday, November 1, 2009 07:48PM Report Comment

31. icarus said...

flashman - holding down their exchange rate causes the Chinese to buy treasury bonds, BoE QE is the type of QE that does the same thing. Added to low policy rates it keeps interest rates in general down. This supports asset prices, or prevents them from falling as fast as they otherwise would. Money made available for shares and other assets is of interest to the City.

Sunday, November 1, 2009 07:50PM Report Comment

32. devo said...


No, your naivety really does fascinate me.

Sunday, November 1, 2009 07:51PM Report Comment

33. quiet guy said...

@Mark Wadsworth

"just numbers on bits of paper going round in ever decreasing circles."

In that case, why are we doing it? After all, if at's just smoke and mirrors that doesn't really have any effect on asset prices but helps the economy, then we can just quease as much as we like forever? Why did nobody spot this free lunch before? Speaking as an economics layman, I find the whole subject quite worrying; the more stridently I am informed that queasing is safe, the more concerned I become - an emotional mistrustful response, I have to admit.

Remember folks, this unprecedented monetary experiment is not affecting asset prices. It's totally safe!

Sunday, November 1, 2009 07:54PM Report Comment

34. crunchy said...

Someone tell me what the bailout now stands at for the USA and UK to the nearest trillion please,

To the taxpayer these sums of money are very real. For anyone to try and down play this is beyond belief.


Sunday, November 1, 2009 08:27PM Report Comment

35. bellwether said...

Flash you query 3 points:-

(1) Mispriced assets. There is no accurate way of writing down values without actual liquidation. It cannot be a book exercise there has to be a sale. The estimates banks are making in relation to many assets are meaningless. Also the act of liquidation increases supply and drives down the price of all similar assets. We then have the problem that many of the assets esp property on which our banking system is predicated is relatively illiquid so true price discovery happens over years. Write down after write down. A permanently compromised consumer. Leaking GDP everywhere killing income further driving down true value of the assets. Sounds horrible but it is just what happened on the way up in reverse.

(2) Currency. Our property bubble is by my reckoning bigger than almost about anywhere on earth. There is an huge dislocation between incomes/price of residential property and rents/commercial real estate. Thus far we have elected not to let this deflate. If that is the plan we are in the realms of debt jubilee. Real QE.

(3) You don't seem to get the umemployment/compromised income point which kind of amazes me. I cannot think of a person who has not had their income compromised and I cannot think of a sector that has not been part slaughtered outside the likes of GS playing with TARP. The list of who is compromised and why is too long to mention but if you can think of people who are better off let me know. For the first time in my lifetime it is the middle classes who have really been hit. the heartland of homeownership.

Sunday, November 1, 2009 08:37PM Report Comment

36. devo said...

32. crunchy said... Someone tell me what the bailout now stands at for the USA.

To answer that would require transparency, which is anathema to TPTB.

I'll go for $24 trillion.

Sunday, November 1, 2009 08:38PM Report Comment

37. Mark Wadsworth said...

Crunchy comment 16 "I made the point that QE has held up house prices, because the Centrals have swapped the banks toxic assets (losses) with printed money"

That may well be true in the USA, and may have slowed down or reversed the house price crash over there, but in the UK 99% of the QE money has been just the BoE buying up government issued gilts.

Yes, the HPC has been slowed down/reversed over here - but that has more to do with low interest rates and lack of repo's and hte fact that banks are not auctioning off repo's etc etc.

Sunday, November 1, 2009 08:39PM Report Comment

38. flashman said...

crunchy: We were talking about QE. To some extent, the bailout and QE are separate matters. Incidentally, I don't approve of either. Anyway, the kids are now in bed, so I'll respond to devo and open a bottle with Mrs F. Cheers

Sunday, November 1, 2009 08:48PM Report Comment

39. bellwether said...

Flash alot of what I think is informed by the idea that we are at the end of something akin to a debt super cycle where we grew GDP for over 2 decades out of credit expansion, using monetary policy to stimulate the consumer whenever we seemed to be tipping over as in the early 90's and then again in 2003/2003. Everytime the doses had to be bigger and the effect was less. We are now at .5 %, but spending is contracting, we are liquidating nothing because there is no breadth in the market at the prices, the state is propping up the consumer, and house prices in a desperate believe that we can return to the mirage of the noughties.

Sunday, November 1, 2009 08:54PM Report Comment

40. alan said...

Westminster has put a very big effort into maintaining the housing bubble. The reasons have been pasted on this site for ages. A debate to cover the reckoning which follows is needed. Lots of economists are writing articles about what could happen. So what is it to be?

World events over the next 6 months can't easily be forecasted. However they play out the UK will be in a much weakened position to respond - hence all the bad mouthing of NuLabour and Gordon Brown as architects of the mess now happening. I suspect these events are played for political advantage. Much the same as Gordon/NuLabour have played the immigration issue.

If things go bad (like a £ slide), events could move swiftly and they will affect the whole economy, not just house prices and the puppeteers will have their strings well and truly cut by the electorate.

Sunday, November 1, 2009 08:54PM Report Comment

41. novice pete said...

crunchy@32 said
For anyone to try and down play this is beyond belief.

The Meaning of Life - Playing Things Down

Sunday, November 1, 2009 08:56PM Report Comment

42. devo said...

35. flashman said... To some extent, the bailout and QE are separate matters

Not in the most important sense.

The bailouts and QE combined sent/are sending out a clear message to the financial industry: you are too big to fail.

Now should this message becomes less clear, due to circumstances beyond the governments' control (plural), then the hiatus in the crash will be over.

Sunday, November 1, 2009 09:08PM Report Comment

43. flashman said...

bellwether: We'll have to leave most of it until another day because I've got to go. I hardly know anyone who's income has been impaired. My biz is going great guns and the economy in these parts is humming along nicely. I accept that other areas are not doing so well. I had a drink with six friends in my local the other day. We never talk about the economy but they were all obviously doing very well (I was the only city worker). Two of them are in the process of buying a bigger house and one of them was expanding his business. Personally, I have just bought a building plot. We all discussed a golf trip to Thailand. I am just telling a rambling anecdote to show you how I might have a different perceptive on the employment and earnings scene.

You don't have to sell an asset to value it. Not all assets are difficult to value

I agree with more of what you say that you might think. Cheers

Sunday, November 1, 2009 09:19PM Report Comment

44. icarus said...

Keynsian stimulus in the '30s meant building public infrastructure and creating jobs, even if some of the projects were boondoggles. Nowadays it means bank bailouts and support for asset prices in order to keep the consumer going.

The other big difference was that in the '30s government budgets in the US were about 7% of GDP - and a similar % in the UK.

bellwether - yep, bigger and bigger jolts to keep the patient alive. Remember those post-war economic miracles, Germany, then Japan, then other parts of Asia. Big growth rates of GDP, employment, investment, real incomes etc. Now we need to stimulate the consumer because he doesn't have the earning power to buy without credit, and he can't get that unless asset prices are artificially inflated.

Banking, debt overhang and asset-price inflation have taken over from investment, production of goods and services and sufficient incomes for workers to provide the demand that keeps things humming.

Sunday, November 1, 2009 09:22PM Report Comment

45. crunchy said...

35. flashman and mark wadsworth

Tell that to the taxpayer. The American bailout is now approx 27 trillion and still counting. That's the trouble with mark and yourself you get

sucked in by the tiny details like drugged up geeks.

Those details are there to deceive and you fall for it everytime.

Let me snap you out of your high. We will be paying for this through generations. You can lable it what you want to.

Sunday, November 1, 2009 09:28PM Report Comment

46. crunchy said...

What do you think derivatives were all about.

Thay were about deception. I shall stop myself there.

Sunday, November 1, 2009 09:36PM Report Comment

47. icarus said...

Can you guess whether these are quotes from FDR or from Obama?

"Practices of the unscrupulous money changers stand indicted in the court of public opinion....Faced by the failure of credit they have proposed only the lending of more money....They know only the rules of a generation of self-seekers......We find more than half the savings of the country invested in corporate stocks and bonds and made the sport of the American stock market......We find fewer than three dozen private banking houses, and stock-selling adjuncts of commercial banks, directing the flow of American capital....We find concentrated economic power...We find a great part of our working population with no chance to make a living except by grace of this concentrated industrial machine....We find Republican leaders proposing no solution except more debts...more government money in business but no government attempt to wrestle with basic problems...."

Sunday, November 1, 2009 09:42PM Report Comment

48. crunchy said...

Franklin Delano Roosevelt originally I think?

Sunday, November 1, 2009 09:50PM Report Comment

49. crunchy said...

The vicious circle of history.

Sunday, November 1, 2009 09:53PM Report Comment

50. icarus said...

crunchy - you win. Imagine Obama saying those things? It illustrates the then and now comparison I was making @ 9.22pm.

Sunday, November 1, 2009 09:58PM Report Comment

51. crunchy said...

But Obama wants CHANGE, yes the peoples CHANGE!!

Sunday, November 1, 2009 10:01PM Report Comment

52. bellwether said...

Cheers Flash. Some other time.

Thanks Icarus, well put. As for the quote they don't make then like that anymore!

Sunday, November 1, 2009 10:25PM Report Comment

53. fallingbuzzard said...

QE is having an impact, it has been flooding commercial banks with cash. They don't want to lend for the sake of lending, just as businesses don't want to borrow for the sake of it, so the banks have been depositing this money at the BOE. Now AD wants the BOE to introduce zero or negative interest rates, so the banks have been switching cash from deposit with the BOE into buying shorter dated government bonds and depressing near term gilt yields. Well done Alistair, tell them what you're going to do before you do it.

Sunday, November 1, 2009 10:48PM Report Comment

54. Rimmer209 said...

Ever wondered where the UK debt is borrowed from? and are the people that lent £1000 Billion pounds happy for GB and his mates to just print some more?

Monday, November 2, 2009 12:44AM Report Comment

55. devo said...

53. fallingbuzzard said... QE is having an impact, it has been flooding commercial banks with cash.

Sounds like an ongoing banking bailout. Would you agree, Mark Wadsworth?

Monday, November 2, 2009 06:13AM Report Comment

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