LONDON (MNI) – The Treasury will sanction more Quantitative Easing
if the Bank of England requests it and it is looking at ways of driving
through “credit easing,” Chancellor of the Exchequer George Osborne said
in a speech at the Conservative Party Conference Monday.
Osborne said by sticking to its deficit reduction plan the
government was helping the BOE to keep interest rates as low as possible
for as long as possible but further policy action may be needed,
including QE and credit easing.
“Because banks are damaged they won’t lend at the current low
rates,” Osborne said.
“We have got to get credit flowing in our economy. Credit means
investment, investment means jobs,” he added.
If the BOE asks for more QE, which many analysts expect will happen
in either October or November, the Treasury will give the central bank
the green light.
“The Bank of England have their own independent judgement to make
on quantitative easing. I have said many times before, I will follow the
procedures of our predecessor and give Treasury approval if asked,”
Osborne said.
“But there is more the government itself can do to get credit
flowing and encourage investment,” he said.
“(Prime Minister) David Cameron and I always said we would be
fiscal conservatives and monetary activists,” he added.
“To get the economy moving I have set the Treasury to work on ways
to inject money directly into the parts of the economy that need it,
such as small business. It’s known as credit easing,” Osborne said.
— London newsroom: 4420 7862 7491 email: drobinson@marketnews.com
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