The BEST UK forecast: Q4 2011 (presentation)

The Bank of England has re-started its Quantitative Easing (QE) programme, but this will do little to avert the coming recession since the programme remains too small in scope, and is ill-designed for that purpose. The current policy has merely benefitted the government through lower borrowing costs, and of course the hedge funds and other financial institutions holding that debt by providing an unquestioning buyer of last resort. It may have boosted inflation, which has acted as a significant drag on living standards for ordinary workers. But it has done next to nothing to boost growth or jobs in the real economy. And even increasing the scope of the QE programme, as currently constituted, to £1trn will not be enough to counter the negative impact of a euro implosion. Though, it would probably be enough to ensure that the real yield on UK government debt remained low or even negative – a policy often referred to as financial repression.

• Download [Requires Login/Registration]