The former chancellor, George Osborne, has finally admitted
that the Bank of England's quantitative easing (effectively printing money) made
the rich richer. He was silent about that fact when he was chancellor.
On top
of that, interest rate cuts hurt savers. So, speaking from Washington in an
interview with Bloomberg TV, Mr Osborne said: “We need to offset the very
necessary loose monetary policy and the distributional consequences that it is
having. Essentially it makes the rich richer and makes life difficult for
ordinary savers.” He added: “There’s a role for government policy not in
stopping that monetary policy which keeps the economy strong but in mitigating
its impact. I think all of us who believe in free markets need to work harder
to find an answer to the anger that people clearly feel out there.” What he
couldn’t bear to say was that the only way to do that is to increase welfare
and benefits, which he cut.
The
Bank of England’s Quantitative Easing (QE) programme (which means
printing money to buy UK government bonds) props up the nation’s asset
prices. For it to help the real economy, it needs to – you’ve guessed it
– trickle down. That’s because most financial assets are owned by the
top 10%. Half of us have no financial assets at all.
How
much QE has there been? The UK created £375bn ($550bn) of new money in
its earlier QE programme between 2009 and 2012. August 2016 brought a
fresh injection of £60bn of QE.
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