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The Bank of England panics and misses the point (The Spectator)

    Ewan Stewart, author of the Centre for Policy Studies report, 'Masking the Symptoms: why QE and huge deficits are not the cure', writes in The Spectator on Wednesday 27th February 2013.

    To view the full article, please visit The Spectator website

    "Wonders never cease. I awoke this morning to hear that the Deputy Governor, Paul Tucker, had announced that consideration should be given to the Bank of England setting negative interest rates. Whatever next?

    Anyone who had seen our current fiscal and monetary predicament, outlined in detail in my Centre for Policy Studies report today, is certainly likely to feel bemused.

    By international standards British monetary and fiscal policy has been extreme. Interest rates, at 0.5 per cent, are already at their lowest rate in the 300 plus year history of the Bank. The fiscal deficit, at over 8 per cent of GDP, is far worse than during the 1970s crisis and much greater than the Euro problem children of Spain, France and Italy. The euphemistically named ‘Asset Purchase Programme,’ or money printing in plain English, now exceeds £350bn and is proportionately much greater than that of either the US Fed, or the ECB. You would have thought that the economy would be jumping out of its sickbed with such medicine. Actually Britain’s GDP performance is the worst of any G20 country, bar Italy."

    To view the full article, please visit The Spectator website

    To view Ewan Stewart's report, 'Masking the Symptoms: why QE and huge deficits are not the cure', please click here

    Date added: Thursday 28th February 2013