Today, the MPC decided to leave interest rates unchanged. However, the bank will continue to pump out the cash.
The BoE's original money creation ceiling of £125 billion should be reached next month. Today's statement hinted that the Bank might want a further authorization to create even more cash.
In summary, there is no end to the madness.
From the BoE's press release....
The Bank of England’s Monetary Policy Committee today voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5%. The Committee also voted to continue with its programme of asset purchases totalling £125 billion financed by the issuance of central bank reserves.
The Committee expects that the announced programme will take another month to complete. The Committee will review the scale of the programme again at its August meeting, alongside its latest inflation projections.
2 comments:
We are close to crossing the Rubicon with QE. If the original £150bn (how glibly we bandy such huge numbers about) is spent and rather than end it there, another tranch of printed cash is authorised, then we are getting in too deep. This money will NEVER be removed from the economy. It will just slosh around, waiting for a tipping point when everyone suddenly decides the recession/depreassion is over, and then BAM! it hits the markets.
I had a meeting today with some people who are in the housing land development business. They said there are already signs of renewed activity in that sector. Nothing massive, but definite signs. It makes sense, if the govt shovels enough printed money in, its going to have an effect eventually.
So they still havn't figured out we need to cut high fixed costs and work our way out of this debt yet?
Economics as a 'political science' has a lot to answer for.
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