Bank of England Takes Desperate Measures for European Banks
Aug. 4, 2016 (EIRNS)—The Bank of England (BoE), following its board meeting Thursday, released a statement taking a very dim view of the British economy in 2016 and 2017. It forecast zero economic growth this year (0.1%, to be exact), and a too-cheery, but nonetheless grim 0.7% for 2017.
But the BoE went into full-flight new quantitative easing ("QE") measures on behalf of the various super-risky, nationalized and/or criminal London banks, and those in the rest of Europe as well. BoE Chairman Mark Carney announced reduction in the Bank’s discount rate to 0.25% from 0.5%, and that the Board was essentially promising to go to a zero discount rate at its September meeting. He also announced 60 billion pounds in BoE purchases of British government gilts and 10 billion pounds purchases of corporate bonds during the remainder of 2016; as well as 100 billion pounds for a new "funding for lending" program of BoE cheap loans to banks which are "in a position to" lend into the British economy.
So much QE in a short time immediately got the name "sledgehammer QE" from financial press, "desperation" being a better name. The total is about $220 billion in new QE, bringing the total QE by the central banks of the trans-Atlantic plus Japan to about $2.4 trillion/year.
The previous funding for lending attempt was discontinued three years ago because it was manifestly not working. The declining pound is causing inflation in the United Kingdom, but the BoE board decided to "look through" that, so as to allegedly fight unemployment.