Magazine article Public Finance

Jury's out on 'Quantitative Easing' Measures

Magazine article Public Finance

Jury's out on 'Quantitative Easing' Measures

Article excerpt

Experts have given a cautious welcome to the government's attempt to get lhe economy back on tiack with the unprecedented measure of quantitative easing.

Lust week the Bank of England announced it would boost bank reserves by buying £75bn of assets over the next three months from financial institutions by creating mon ey. The first purchase of £2bn of government bonds took place on March 11.

Tony Dolphin, senior economist at thi; Institute for Public Policy Research, said that while there was a danger that banks might hoard the cash, it could help prompt them to start lending again.

'It does get you nearer to the point when you start to return to normal again,' he said. 'I think it's the right thing to do, but it doesn't guarantee success.'

Martin Weale, director of the National Institute of Economic and Social Research, also welcomed the decision. …

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