Forex & Economic Commentary by Lloyds TSB

Quantitative Easing (QE), the purchase of private and public sector debt by the central bank financed by an expansion of its balance sheet, has been in place in the UK since March. Similar policies are also in place in other countries.

Is it too soon to start withdrawing QE?

Quantitative Easing (QE), the purchase of private and public sector debt by the central bank financed by an expansion of its balance sheet, has been in place in the UK since March. Similar policies are also in place in other countries. There appears to be a difference of opinion about whether QE is working or not. Most agree that it has been essential in preventing a financial collapse in early 2009, and in the immediate aftermath of the failure of Lehman Brothers on 16 September 2008. This is not just true for the UK, however. Injections of liquidity (cash) into financial markets by central banks in many other countries were also essential in staving off a global financial calamity.

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