The Chancellor today gave the Bank of England the go ahead to
print money begin quabtative easing ,
move money electronically, which is kind of like printing money begin quantative easing.
http://business.timesonline.co.uk/tol/business/economics/article5851028.eceThe Bank of England today embarked on radical moves to “print money” in an aggressive new phase of its battle to combat Britain’s economic slump.
In a landmark decision that marks a determined stepping-up of its fight to end recession and secure a recovery, the Bank confirmed it is beginning a strategy of so-called “quantitative easing”. It is to pump £75 billion of newly created money into the economy over three months.
The ground-breaking step came as the Bank’s rate-setting Monetary Policy Committee also pushed interest rates to yet another historic low.
The MPC ordered another half-point cut in base rate from an existing 1 per cent that was already the lowest in the Bank’s 314-year history to a new all-time low of 0.5 per cent.
But the focus of interest on today's crucial decisions from the Bank was on the move to press ahead with the measures of so-called “quantitative easing”, or “QE”.
These have become necessary in part because with interest rates having been cut so sharply in recent months, the Bank is close to the zero limit below which rates cannot fall.
The green light for today’s drastic action was given by the Chancellor in a letter to Mervyn King, the Bank’s Governor, released today alongside the MPC’s announcement that it will immediately put to work its new powers to pump up the amount of cash and credit flowing in the economy in an attempt to jump-start growth.
The MPC’s decision to press on rapidly with QE, signalled a fortnight ago in minutes of its last meeting, means that it will now begin buying from commercial banks a range of corporate bonds (businesses’ IOUs) and Treasury gilt-edged stock or “gilts” (Government IOUs).
The Bank will pay for these assets by creating new money, electronically, in a modern-day version of running its printing presses.
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Interesting. If you don't mind I'm going to make some space under my bed....
