The Bank of England is due to introduce quantitative easing in order to try and prevent deflation in the UK. Quantitative easing is a method not used in around 30 years, and in a nutshell involves 'printing money' - by buying government and corporate bonds, the cash and credit flow to the economy increases, which in turn encourages spending and lending.
The move is due to be given the go-ahead by the government and could be put into action imminently. There are many who oppose the measure, and say that it could cause hyperinflation which historically caused some bigger disasters - even currently, places like Zimbabwe are suffering the effects of longterm inflation. There is also the risk to the currency - the pound has fallen further on the news, and surely a new influx of currency would only serve to depreciate the value of the pound? There are many who may be loathe to buy currency that is going to give no rewards.
Is the bank being reckless or is this really the best thing for the country?
Subscribe to:
Post Comments (Atom)
1 comment:
Post a Comment