Extra £50bn pumped into economy

halight

http://news.bbc.co.uk/1/hi/business/8187360.stm

The Bank of England's rate-setters have decided to pump another £50bn of new money into the economy in their programme of quantitative easing.

halight

Start the printing press up lads!

Graham_Devon

I thought it was only stopped the other day!?!?

So, were now over the £150bn, now at £175bn.

I thought everything was looking up, so why the need for this?

Ad was completely right the other day when he said the BOE will give in to the banks plea for more.

Really2

Lowers the exchange rates and the stock market loves it by the look of it.

Graham_Devon

Stock market loves it.

Wheres Generali, I want the lowdown!!

I would also like to know why the recession is deeper than previously thought. I've gone back to full on bear in the last 5 minutes!!

BenL

Does the MPC have access to as yet unpublished reports and data so they are pumping in and announcing this before bad news comes out later in the week/next week?

I've read good news all week that everything is fine!

Graham_Devon

Even an economist at RBS is surprised and says it is backward looking.

I'm wondering how much political pressure has been put on here. And how much this is linked with the US.

Really2

Graham_Devon wrote: »

Stock market loves it.

Wheres Generali, I want the lowdown!!

I would also like to know why the recession is deeper than previously thought. I've gone back to full on bear in the last 5 minutes!!

From the BBC site.

"Clearly the MPC has taken seriously the sharper-than-expected decline in second-quarter economic growth."
"Despite today's encouraging economic news, the Bank's policymakers probably believe there is greater risk in doing too little than in doing too much."

I presume the stock market likes it because it means the borrowing could/should be easier for companies.

As odd as it sounds the £ devaluing will help also.

Graham_Devon

Might help today. What about in the future. Theres something building up. I'm sure we will find out what it is in the coming weeks / months.

Really2

Graham_Devon wrote: »

Might help today. What about in the future.

If you don't help today what is the future?:rolleyes:


How come everyone knows the future and not me

Generali

Graham_Devon wrote: »

Stock market loves it.

Wheres Generali, I want the lowdown!!

I would also like to know why the recession is deeper than previously thought. I've gone back to full on bear in the last 5 minutes!!

My guess is that this is being done to lower the value of the pound to stave off deflation.

The trouble is that the usual method of boosting the money supply by making it easier for banks to lend and businesses/individuals to borrow isn't working as banks don't want to lend and their customers don't want to borrow.

I stick with what I've been saying for the past 3 years - there is a definite and growing risk that debt deflation is going to translate into price deflation as the money supply falls. By ramping up borrowing, the Government is making things worse.