BOE Unanimously Asks For Authority to Create Money

[D-Mack]

BOE Unanimously Asks For Authority to Create Money (Update1)

Feb. 18 (Bloomberg) -- Bank of England policy makers unanimously agreed to ask the government for authority to create money in an effort to kick start the economy, saying further interest rate cuts may hurt the profitability of banks.

The Monetary Policy Committee, led by Governor Mervyn King, voted 8-1 to cut the main rate to 1 percent, the lowest since the central bank was founded in 1694, minutes of the Feb. 5 decision published in London today show. David Blanchflower, argued for a deeper reduction so rates go as low as possible “without delay.”

The minutes suggest rates cuts are becoming less potent, pushing the central bank to use unprecedented means to revive the economy from its worst slump since 1980. King and Chancellor of the Exchequer Alistair Darling will exchange letters about the next steps within a few days, a spokesman for the Treasury said.

“To the extent that further cuts in bank rate could not inject sufficient stimulus, the committee would need to use alternative policy measures,” the minutes said. “Therefore the committee unanimously agree that the governor should write on its behalf to the chancellor to seek authority to conduct purchases of government and other securities, financed by the creation of central bank money.”

The pound fell after the report and traded at $1.4167 as of 10:20 a.m. in London.

...

We knew that before they published the report

[FRED]

Re: BOE Unanimously Asks For Authority to Create Money

BOE Unanimously Asks For Authority to Create Money (Update1)

Feb. 18 (Bloomberg) -- Bank of England policy makers unanimously agreed to ask the government for authority to create money in an effort to kick start the economy, saying further interest rate cuts may hurt the profitability of banks.

The Monetary Policy Committee, led by Governor Mervyn King, voted 8-1 to cut the main rate to 1 percent, the lowest since the central bank was founded in 1694, minutes of the Feb. 5 decision published in London today show. David Blanchflower, argued for a deeper reduction so rates go as low as possible “without delay.”

The minutes suggest rates cuts are becoming less potent, pushing the central bank to use unprecedented means to revive the economy from its worst slump since 1980. King and Chancellor of the Exchequer Alistair Darling will exchange letters about the next steps within a few days, a spokesman for the Treasury said.

“To the extent that further cuts in bank rate could not inject sufficient stimulus, the committee would need to use alternative policy measures,” the minutes said. “Therefore the committee unanimously agree that the governor should write on its behalf to the chancellor to seek authority to conduct purchases of government and other securities, financed by the creation of central bank money.”

The pound fell after the report and traded at $1.4167 as of 10:20 a.m. in London.

...

We knew that before they published the report

See: The Fed's Maginot Line

[Mega]

Re: BOE Unanimously Asks For Authority to Create Money

Fred, might i trouble you for your opium on this:-
http://www.financialsense.com/fsu/ed...2009/0217.html
Mike

[GRG55]

Re: BOE Unanimously Asks For Authority to Create Money

BOE Unanimously Asks For Authority to Create Money (Update1)

Feb. 18 (Bloomberg) -- Bank of England policy makers unanimously agreed to ask the government for authority to create money in an effort to kick start the economy, saying further interest rate cuts may hurt the profitability of banks.

The Monetary Policy Committee, led by Governor Mervyn King, voted 8-1 to cut the main rate to 1 percent, the lowest since the central bank was founded in 1694, minutes of the Feb. 5 decision published in London today show. David Blanchflower, argued for a deeper reduction so rates go as low as possible “without delay.”

The minutes suggest rates cuts are becoming less potent, pushing the central bank to use unprecedented means to revive the economy from its worst slump since 1980. King and Chancellor of the Exchequer Alistair Darling will exchange letters about the next steps within a few days, a spokesman for the Treasury said.

“To the extent that further cuts in bank rate could not inject sufficient stimulus, the committee would need to use alternative policy measures,” the minutes said. “Therefore the committee unanimously agree that the governor should write on its behalf to the chancellor to seek authority to conduct purchases of government and other securities, financed by the creation of central bank money.”

The pound fell after the report and traded at $1.4167 as of 10:20 a.m. in London.

...

We knew that before they published the report

Quantitative Easing...otherwise known as Quite Expensive.;)

BOE May Cut Key Rate as Focus Shifts to Money Supply

March 5 (Bloomberg) -- The Bank of England may cut its benchmark interest rate almost to zero today as Governor Mervyn King faces pressure to spell out plans to revamp monetary policy and print money.

The central bank’s nine-member panel will probably cut the bank rate by a half point to 0.5 percent, the median of 60 economists’ forecasts in a Bloomberg survey shows. The Treasury may also give King and his colleagues authority to create money and pump it into the economy by buying assets.

The use of so-called quantitative easing will add to the Bank of England’s armory as officials struggle to rescue an economy shrinking the most in almost three decades. The bank has already cut its key rate to the lowest since it was founded in 1694, and Gordon Brown’s government has pledged billions of pounds to restore the flow of credit.

“That will be the end of the rate cuts, and the focus will be on quantitative easing,” said Simon Hayes, an economist at Barclays Plc in London who used to work at the central bank...