Jeffrey: Will £75bn more QE really change things for the better?

£75BN MORE QE

Mervyn King justified the latest round of quantitative easing with the observation that we are in the midst of "the most serious financial crisis at least since the 1930s, if not ever".

This is hardly news to anyone involved in financial markets or who has had even half an eye on recent developments in the domestic and world economies. The question the Monetary Policy Committee needs to answer is why the injection of another £75bn (over and above the £200bn added through the first rounds of QE) will change things for the better in the UK. With any shift in policy, you have to balance the likelihood of it achieving the intended objectives against the potential for unintended consequences; all too often, the latter outweigh the former. Adding additional liquidity eq...