Friday, 20 February 2009

UK fast tracks quantitative easing - just in time policy for Treasury refunding season?

The following news report from Bloomberg shows that the UK financial establishment is getting more worried about the severity of the current recession. No wonder when they face, declining tax revenues, plenty of public support required for insolvent banks and a need to sell UK gilts to an ever increasing number of institutional investors and foreigners that may be losing their appetites.

Feb. 20 (Bloomberg) -- Bank of England Deputy Governor John Gieve said policy makers are trying to protect Britain from the threat of a decade-long slump similar to that experienced by Japan in the 1990s.

“Do we face a ten-year depression like Japan? That is a risk, and a risk that we and other policy makers are taking very seriously,” he said late yesterday after a speech at the London School of Economics. “It’s a serious risk but we are addressing it. There’s a huge amount of policy easing in the pipeline. I don’t think it’s inevitable.”

Separately it now appears that the Bank of England is fast tracking the move to quantitative easing - just in time for Treasury refunding season.

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