George Osborne made some interesting comments about quantitative easing and loose monetary policy this week that showed some new thinking:
George Osborne said: “We need to offset the very necessary loose monetary policy and the distributional consequences that it is having. Essentially it makes the rich richer and makes life difficult for ordinary savers.”
“There’s a role for government policy not in stopping that monetary policy which keeps the economy strong but in mitigating its impact. I think all of us who believe in free markets need to work harder to find an answer to the anger that people clearly feel out there.”
This followed on from comments made by the Bank of England’s deputy governor Minouche Shafik that suggested quantitative easing is here to stay. New thinking at the Bank of England seems to favour QE as a permanent tool of monetary policy.
The FTSE 100 is up this morning but is still under 6000, a big drop from last year’s high of over 7000. Is this the bottom? I see no signs of the economy being managed any better and if share prices go lower we will see acquisitions. A few companies have already gone to overseas buyers. (more…)