For Your Protection and Peace of Mind
All our loans & procedures are approved and qualified by our fully experienced compliance team to ensure they meet our high standards and comply with all current regulatory requirements
 News |
|
Search Categories |
| Archive News |
Quantitative easing on the agenda at upcoming Bank of England meeting
The Bank of England seems set to reduce interest rates closer to zero and begin quantitative easing, the modern-day equivalent of printing money.
Government ministers are currently drafting a letter approving the scheme, the Daily Telegraph reports.
Quantitative easing involves the central bank's purchasing corporate bonds alongside government bonds, in order to increase the money supply.
In turn, this can boost slowing economies by making loans, including bad credit loans, easier to come by.
However, it is widely seen as a last-resort "nuclear option", due to the potential of stoking up inflation inherent in increasing the amount of money in the financial system.
Speaking to the newspaper, Michael Saunders, chief UK economist at Citigroup, said: "If done on a large enough scale, [quantitative easing] is a powerful form of stimulus.
"It is likely to ultimately stabilise the economy and buy time for the financial system to heal… of course, if and when the recession eventually ends, the [Bank] will face the major challenge of judging when to scale back quantitative easing."
The Bank's Monetary Policy Committee meets later this week to set the new lending rate.