Ok - so interest rates are now down another half per cent. Just in time for anybody with ISA's etc to receive their annual interest on their accounts - cynical not me
This concept of quantitative easing is something I have not heard of before - as I understand it - we are pumping more money into the banks to encourage them to lend.
But its alright because it's not 'real ' money it's all electronic
) The Bank creates new money electronically in its accounts.
2) The Bank buys bonds (companies’ IOUs) and gilts (Government IOUs) from commercial banks.
3) The value of the bonds and gilts bought is now credited to banks that sold them.
4) The commercial banks can make new loans against the increased funding.
5) Extra lending boosts cash and credit flowing in the economy.
6) Extra demand for bonds and gilts from the Bank drives down interest rates for business and consumer borrowers.
7) Flows of extra and cheaper money stimulate growth
That'll work
