Why Quantitative Easing Is the Only Game in Town - Business News - CNBC: "The BoE’s view is that QE is a natural extension of monetary policy, necessary when the short rate is 0.5 percent, the lowest rate in the 318 years of the BoE’s existence. With conventional measures exhausted, the BoE, like the Federal Reserve and the European Central Bank, has been driven to try highly unconventional measures instead.
The BoE argues that asset purchases work by restoring confidence, signalling future policy, forcing rebalancing of portfolios, improving liquidity and increasing the money supply when the standard mechanism – lending by banks – has frozen."
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