Daily Archives: October 6, 2011

Claire Jones

When the Bank of England was considering quantitative easing back in early 2009, George Osborne, then shadow chancellor, lambasted it as the “last resort of desperate governments when all other policies have failed.”

A general election later and, unsurprisingly, Mr Osborne is a little less critical. This from today’s letter to Sir Mervyn King: 

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Claire Jones

The European Central Bank has held its main refinancing rate at 1.5 per cent, as expected.

We’ll be live blogging on Jean-Claude Trichet’s press conference, which begins at 13.30 London time, on The World blog. Mr Trichet is expected to announce more liquidity support for eurozone banks then. Read more

Claire Jones

The Bank of England’s Monetary Policy Committee just has backed more asset purchases.

It will buy £75bn-worth of bonds, taking its total stock of asset purchases to £275bn. Read more

Claire Jones

We’ll be live blogging the ECB’s press conference today on the FT’s The World blog from 13.30 London time.

The FT’s Frankfurt bureau chief Ralph Atkins has written here on what to expect.

Sir Mervyn King secured a decisive victory over the Treasury this week when the latter finally took on the task of credit easing. For the governor of the Bank of England – better placed to do the job, but adamant that this would taint the Bank’s independence – it was a triumph of bureaucratic precision over pragmatism; and of order over action. Britain will not thank him for it if institutional purity comes at the cost of jobs and corporate financing.

The Treasury disguised its surrender: chancellor George Osborne won plaudits from the Conservative party faithful for pledging to bring forward plans to ease the flow of credit to small- and medium-sized companies. But the proper reaction to his words would have been one of bemusement.

Credit easing is far from a new policy lever. It was first announced by Alistair Darling, Mr Osborne’s predecessor, on January 19 2009 and clarified in an exchange of letters between the governor and the then chancellor later that month.

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