The UK's Economic Downturn Is &Nbsp; The Central Bank Is Pushing For Quantitative Easing.

As expected, the Bank of England England bank announced a new round of quantitative easing policy at noon on 6 noon, and injected another 75 billion pounds of money into the market to ignite and promote growth in the current flagging British economy. Coupled with the previous round of capital injection, the Bank of England's quantitative easing capital injection amounted to 275 billion pounds. At the same time, the Bank of England also decided that interest rates of 0.5% would remain unchanged, the lowest interest rate recorded in the bank's history. The Bank of England announced the launch of a new round of quantitative easing at the moment, one month ahead of the original estimate of November, and the amount of money injected is larger than expected 50 billion pounds, which in itself indicates that the current economic situation in the UK is not optimistic.

The so-called quantitative easing policy, in other words, is the central bank injecting more into its own economy. cash It is usually purchased in the form of assets such as government bonds, in order to stimulate economic vitality and stimulate growth.

The Bank of England said in a statement that the UK's economic growth path has been affected by some temporary factors, but the current economic indicators show that the basic growth rate of the UK economy is still appropriate. Moreover, a pessimistic atmosphere for economic growth expectations is more likely to make the medium term. currency The target rate is below 2%. Taking into account the changes in the above risk balance factors, in order to maintain the medium-term inflation rate at the target level, the central bank decided that it is necessary to inject more monetary stimulus into the economy now.

The temporary factors mentioned in the central bank's statement mainly refer to the day before the announcement of the decision by the Bank of England. In October 5th, the data showed that the economic growth rate in the 4-6 quarter of this year in Britain was only 0. 1%, lower than the expected figure, and the media commentary said that the British economy is facing a deeper and more severe recession. In addition, the euro zone sovereign debt crisis is taking place, which has also cast a shadow over the declining British economy.

From the reaction of the first time after the announcement of the central bank's decision, some economists in the UK have introduced a new round of quantification to the central bank at the moment. Easy Policies welcome and affirm, but some economists are not optimistic about its stimulating role in the current context.

In an interview with our reporter, Mr. George Magnus, senior economist of UBS, said that the Bank of England was worried that the growth momentum of the UK economy was stagnant and could be further aggravated by the impact of the euro zone sovereign debt crisis. The BOE said that the first round of quantitative easing launched in March 2009 has played a positive role in GDP growth and inflation. But we must not forget that the world economy was jumping away from the abyss of financial crisis. Magnus said: "I think this round of quantitative easing measures may not be so successful. Nevertheless, I welcome the decision of the central bank. " If the UK economy continues to decline this winter, or the price of real estate and other assets continues to fall, the central bank's quantitative easing policy may need to be increased and bolder.

Magnus pointed out that what the British economy needs now is that the budgetary policy is in line with quantitative easing measures, but there is no indication that the government will change the austerity plan for drastically reducing the budget. We hope that the British government will finally realize that promoting growth is the priority at present. Magnus believes that quantitative easing will not trigger inflation threat in Britain until the flow of funds and credit expansion do not work.

The British Industrial Association and the British Chamber of Commerce welcomed the central bank's introduction of a new round of quantitative easing policy, but they also believed that its role was limited only in terms of the policy itself. According to Broadcasting British Corporation, Ian Mccafferty, chief economic adviser of the British Industrial Association, said the new measures will help support confidence, but it is important to note that this measure is unlikely to boost growth in the near future, and that confidence can only be fully restored only when the debt turmoil in the eurozone is resolved.