Bank of England Employs Quantitative Easing

The Bank of England announced its plans to employ quantitative easing as predicted by Belsize last month. £75 billion will be pumped into the system in a bid to boost the flagging UK economy. It is interesting to note that the government have cited their concerns over the European crisis as one of the key drivers for adopting this policy earlier than originally anticipated. 

It is hoped that this latest move will provide stimulus through the correct channels to boost spending in the UK.  Economists will ofcourse point out that this is likely to impact on inflation which has been steadily rising in the UK over the past 9 months since the VAT increase to 20%. We have already seen rising fuel and food prices and rent and house prices have had a notable increase over the summer. Savers will be hardest hit by the rising inflation as money in the bank is generating near zero interest and savings could be diminished as the cost of goods continues to rise. It is time to consider investing in property or other tangible assets for those who are able.