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Bank may pump more cash into UK
IveSeenTheLight
Posts: 13,322 Forumite
from http://news.bbc.co.uk/2/hi/business/8141518.stm
Bank may pump more cash into UK
The Bank of England is expected to keep interest rates at their historic low of 0.5% on Thursday. But it may announce an extension of its quantitative easing scheme under which it prints money to buy bonds in order to stimulate the economy.
At the moment it plans to spend £125bn, but it can increase that by £25bn without asking the Treasury.
At the current rate of spending, the £125bn will all have been spent in the next two weeks.
Taking on the extra £25bn would allow the Bank's Monetary Policy Committee (MPC) to see the next set of quarterly economic forecasts before it decides whether to ask the Treasury to extend the scheme further.
Continuing declines
At its last meeting, the MPC noted there had been encouraging news on the economy.
"Overall, the risk of a continued sharp contraction on output in the near term had receded somewhat," the minutes from the June meeting said.
However, the committee added that there was not enough evidence to suggest that the medium-term outlook for the economy had changed significantly since the Bank's last Inflation Report in May.
While survey evidence from the likes of the British Chambers of Commerce suggests that economic conditions may be improving, economic data has showed continuing declines.
Since the MPC last met, the amount that the UK economy contracted in the first three months of the year has been raised from 1.9% to 2.4%, a decline not exceeded for 51 years.
Also, UK unemployment rose to 2.261 million in the three months to April, the highest since November 1996, while industrial output fell by an unexpectedly large amount in May following April's rise.
Bank may pump more cash into UK
The Bank of England is expected to keep interest rates at their historic low of 0.5% on Thursday. But it may announce an extension of its quantitative easing scheme under which it prints money to buy bonds in order to stimulate the economy.
At the moment it plans to spend £125bn, but it can increase that by £25bn without asking the Treasury.
At the current rate of spending, the £125bn will all have been spent in the next two weeks.
Taking on the extra £25bn would allow the Bank's Monetary Policy Committee (MPC) to see the next set of quarterly economic forecasts before it decides whether to ask the Treasury to extend the scheme further.
Continuing declines
At its last meeting, the MPC noted there had been encouraging news on the economy.
"Overall, the risk of a continued sharp contraction on output in the near term had receded somewhat," the minutes from the June meeting said.
However, the committee added that there was not enough evidence to suggest that the medium-term outlook for the economy had changed significantly since the Bank's last Inflation Report in May.
While survey evidence from the likes of the British Chambers of Commerce suggests that economic conditions may be improving, economic data has showed continuing declines.
Since the MPC last met, the amount that the UK economy contracted in the first three months of the year has been raised from 1.9% to 2.4%, a decline not exceeded for 51 years.
Also, UK unemployment rose to 2.261 million in the three months to April, the highest since November 1996, while industrial output fell by an unexpectedly large amount in May following April's rise.
:wall:
What we've got here is....... failure to communicate.
Some men you just can't reach.
:wall:
What we've got here is....... failure to communicate.
Some men you just can't reach.
:wall:
0
Comments
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As was likely to happen in the first place, they can't resist the print button can they ? Of course they will be forced to stop it at some point, that point will be at a time when the UK deficit will still be through the roof and the borrowed money still to be repaid....... what then I wonder ?0
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I did a post on QE the other day, but apart from Hamish blabbering about seal blubber or something else completely irrelevant, seems no one wanted to know!
Anyway, seems QE is not working....in a nutshell. But some economists think QE will now be extended even further than the initial £150bn.0 -
Isn't this an old story being re-hashed ?
The additional £ 25,000,000,000 facility has been public knowledge for months.'In nature, there are neither rewards nor punishments - there are Consequences.'0 -
Graham_Devon wrote: »I did a post on QE the other day, but apart from Hamish blabbering about seal blubber or something else completely irrelevant, seems no one wanted to know!
Perhaps cos you'd have ranted at them for anything other than agreement with your viewpoint. Sometimes I can't be bothered!
(Other times I can) :rolleyes:0 -
Graham_Devon wrote: »Anyway, seems QE is not working....in a nutshell.
The thing is whilst you are still doing it, it is percieved to be working by the people who are pressing the print button, it's only when it's stopped that we see that it hasn't. It should noted by everyone else that the fact that you have to continue doing something over a period of time may suggest that it's not really working.0 -
We have know for months now that thay could go upto 150billion
And thay will say today that are are.
But i wonder next month or the month after maybe, What will thay do then?? were will thay stop? I think it will be extended even more over the next 12 months we might see them print upto 250billion or maybe even 300billion Silly numbers i know but just because thay are now reaching there printing limmit dose not mean thay thay wont reconmend that thay need to carry on. And get perpishion off the Gov to do so.:jYou can have everything you wont in lfe, If you only help enough other people to get what they wont.:j0 -
JonnyBravo wrote: »Perhaps cos you'd have ranted at them for anything other than agreement with your viewpoint. Sometimes I can't be bothered!
(Other times I can) :rolleyes:
I didnt offer a viewpoint
Nice though, I rather like what you did there, getting all personal on something so utterly trivial and non personal to anyone else that I had stated.
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Graham_Devon wrote: »I didnt offer a viewpoint
Nice though, I rather like what you did there, getting all personal on something so utterly trivial and non personal to anyone else that I had stated.
Well seeing as you felt it was your place to join nearlynew and ISTL's discussion with a "personal analysis" I thought I'd follow suit.
:cool:0 -
JonnyBravo wrote: »Well seeing as you felt it was your place to join nearlynew and ISTL's discussion with a "personal analysis" I thought I'd follow suit.
:cool:
I'm honoured.
Extremely mature of you I must say
That was hardly discussion by the way, that was lies and spin to make a poster look like he was telling lies. Something I found a bit wrong, and a little, well, sad. 0 -
Graham_Devon wrote: »I'm honoured.
Extremely mature of you I must say
That was hardly discussion by the way, that was lies and spin to make a poster look like he was telling lies. Something I found a bit wrong, and a little, well, sad.
So you're the man who can definitively spot a lie..... I shall of course be running lots of things past you now to establish the absolute truth. :rolleyes:
Or perhaps you have a preferred "slant" and bias towards posts on said "slant" .
:T0
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