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Breaking: Bank Of England Bats For Quantitative Easing Measures

Manoj Nair



Quantitative Easing

The Bank Of England is hoping to improve the macroeconomic condition in the United Kingdom and is taking a number of quantitative easing measures in this direction. The Pound Sterling has fallen to its lowest levels against the US Dollar and the Bank of England will buy long-dated government bonds to restore balance in the UK economy.

The announcement of the tax cut plans by the incoming UK PM has led to the Pound falling to its lowest levels against the US dollar. Kwasi Kwarteng, the new UK Chancellor, unveiled debt-financed tax cuts.

The IMF has also derided the newly formed conservative government for its ill-timed tax cut plan. The news of quantitative easing led to a sudden surge in BTC values but the prices sank after the dollar strengthened its rally.

The Quantitative Easing Explained

UK is in the midst of an economic crisis of unimaginable proportions. A surging inflation which can only be controlled by tough measures like interest rate hikes. However, this could also provoke a recession which is the last thing which anyone wants especially after the pandemic. The fear of recession will negatively impact the macroeconomic situation in the UK. The Bank of England will enforce quantitative easing as they believe it will restore balance in the economy.

However market players are not very pleased with the central bank’s decision and feel that it could lead to another bout of hyperinflation in the economy. Peter Schiff, a renowned economic expert, and investor, warned of the exact phenomenon.

The fiscal policy of the new UK Government has come into focus especially after the White House has dispelled the fears of a strong dollar. The Green Bill values climbed further after the quantitative easing news broke in the market.

Will The Federal Reserve Follow Suit

The Fed is showing a hawkish posture and will do everything to control the surging inflation. However fears of a looming recession could once again force the Fed to adopt a more concillatory posture for Quantitative Easing.

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