Economics Weekly by Llyods TSB

The transition from using interest rates as the sole monetary policy tool by the Bank of England to combat recession and the continuing dislocation in credit markets and to using other less conventional measures is now firmly underway.

Threat of deflation leading BOE to money creation

 

The transition from using interest rates as the sole monetary policy tool by the Bank of England to combat recession and the continuing dislocation in credit markets and to using other less conventional measures is now firmly underway. The final step will be for the Bank to directly boost money supply and it now has permission from the government, via the Treasury, to embark on a course to do just that. There have been some very clear signposts in the last few weeks and months, not least the rapidly deteriorating global economic situation. This is leading to a significant weakening of global inflation pressure as commodity prices fall. In addition, despite a plethora of government initiatives and increased public spending around the world, stresses in credit markets remain intense.

 

Full Report

www.forexhound.com/Uploads/160209EconomicsweeklyEMAIL.pdf