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Is Bank preparing for £375bn more QE?

Richard Woolnough
Richard Woolnough

Another £375bn in quantitative easing (QE) could be pumped into the UK economy over the next three years if Mervyn King’s outlook is correct, M&G fund manager Richard Woolnough points out.

At the end of June, Bank of England governor King told the Treasury Select Committee that the crisis is far from over. “All the way through, I’ve said to this committee that I don’t think we are yet half-way through – I’ve always said that and I’m still saying it,” he told MPs.

Woolnough notes the implications this outlook has for gilt yields and the UK economy.

“If we are not yet half-way through this crisis, then this implies that [interest] rates will stay at these levels for at least another three years to 2015, and a further round of £375bn of QE is potentially on the agenda,” he says.

“If this interpretation of the outlook turns out to be correct then these very low levels of short and long term gilt yields begin to look more logical to gilt investors.”

Woolnough adds that the ultra low yields being seen in US treasuries and German bunds also make sense if it is assumed the UK will not recover until the economy outlook in the US and Europe starts to improve.

Last week, the Bank of England boosted its asset purchase programme by another £50bn, taking the total amount committed to QE up to £375bn, after citing a weaker outlook for UK output growth.

The base rate was also held at its historic low of 0.5 per cent, where it has sat since March 2009.

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  • Chris Gardner 13th July 2012 at 5:09 pm

    @Fully Informed | 11 Jul 2012 3:15 pm

    no its definately the illuminati – david ike told.

  • Fully Informed 11th July 2012 at 3:15 pm

    What a bunch of trolls. You all have pyjamas that zip up the back I reckon….zion conspiracies, illegal immigrants, welfare scroungers. Oh dear, oh dear. I hope you don’t represent to mortgage industry.

  • David Leigh 11th July 2012 at 12:45 pm

    Debt based economics and the modern fascism embedded within the construct has been a curse on mankind for more than a thousand years. Where ever these demonic entities have perceived a potential for implementing slavery, they have implemented their economic terrorism.

    The mort-gage a death pledge that the innocent and trusting placed their signs of nature onto, trusting that all was well, but only to find over time, that they faced a terminally impossible situation.

    All the poverty you now see, has come from nothing as these illusionists have sought to proclaim themselves to be respectable.
    The crisis is even now being used to attempt to bring in a tyrannical rule and good peoples lives are being rubber stamped into homelessness and abject poverty.

    Look at what the money controllers are directing these perniciously evil tokens of credit into. More war, security that protects the corporations and the disenfranchisement of any that either see the evil, or do not want to transgress against their neighbours.

    The weather, a foreboding signal of even more loss. Record levels of cloud and rain are destroying many crops. Unprecedented since records began and suspected by many to be assisted with geo-engineering.

    The banks were always fair weather friends, but now it is clear to all – THEY ARE KILLERS & DESTROYERS OF NATIONS

  • David Leigh 11th July 2012 at 12:42 pm

    As a hard working and practical man with a skill set and capabilities towards solutions in respect of architecture and the environment, I have watched this poisonous and deadly construct, move towards its climax for more than ten years.

    Debt based economics and the modern fascism embedded within the construct has been a curse on mankind for more than a thousand years. Where ever these demonic entities have perceived a potential for implementing slavery, they have implemented their economic terrorism.

    The mort-gage a death pledge that the innocent and trusting placed their signs of nature onto, trusting that all was well, but only to find over time, that they faced a terminally impossible situation.

    All the poverty you now see, has come from nothing as these illusionists have sought to proclaim themselves to be respectable.
    The crisis is even now being used to attempt to bring in a tyrannical rule and good peoples lives are being rubber stamped into homelessness and abject poverty.

    Look at what the money controllers are directing these perniciously evil tokens of credit into. More war, security that protects the corporations and the disenfranchisement of any that either see the evil, or do not want to transgress against their neighbours.

    The weather, a foreboding signal of even more loss. Record levels of cloud and rain are destroying many crops. Unprecedented since records began and suspected by many to be assisted with geo-engineering.

    The banks were always fair weather friends, but now it is clear to all – THEY ARE KILLERS & DESTROYERS OF NATIONS

  • Shaks 9th July 2012 at 6:43 pm

    “I care not what puppet is placed on the throne of England to rule the Empire. The man who controls Britain’s money supply controls the British Empire and I control the British money supply.” – Nathan Rothschild

    These are the words of the sleazy zionazi money lenders who robbed the state

  • Shaks 9th July 2012 at 6:25 pm

    “Give me control of a nation’s money and I care not who makes it’s laws” — Mayer Amschel Bauer Rothschild

    This thief Rothschild was a sleazy, filthy zionist serpent head of the current banking dynasty who own and control the BOE and the Federal Reserve in the USA. Basiaclly he is saying that as long as he can control the issuance of credit and debt to a state then he can do as he pleases and bring that state to ruin once he has sucked the last drop of blood.

  • Shaks 9th July 2012 at 6:01 pm

    So the privately owned Bank of England wants to print more money out of fresh air, worthless and backed by nothing, not even fresh air and then our government is left with a huge interest debt that is payable to the sleazy zionist theieves who own and run the privately owned bank of england. We need to suspend The BOE and the Fed Reserve and put the ownership within the state. We will be debt slaves as long as these so-called central banks remain in privately owned sleazy zionazi control. We should demand FREEDOM!!!!!!

  • Bill Wells 9th July 2012 at 5:46 pm

    I hope you’re wrong.

    These idiots (politicians and bankers) don’t have any answers except to decimate the savings of all those people who have worked hard to put away a few bob for a rainy day. Printing money is not the answer.

    We need to get rid of the immigrants, build some factories to start producing things that other countries want, and get all the benefit cheats into useful work. Then, and only then, the UK economy might get back on its feet.