finisterre
Active Member
okay I think it is like this
The BoE buys Government Bonds (originally issued by the Treasury) from banks etc.
The 75Bn is backed by the BoE so it is real and spendable
The banks now have a load of cash which makes them chirpy
The banks lend the money to corporations etc because it is spare cash
The corps spend more, invest more in operations and therefore sell more stuff abroad.
The BoE buys Government Bonds (originally issued by the Treasury) from banks etc.
The 75Bn is backed by the BoE so it is real and spendable
The banks now have a load of cash which makes them chirpy
The banks lend the money to corporations etc because it is spare cash
The corps spend more, invest more in operations and therefore sell more stuff abroad.
- Deflation is avoided.
- banks are more profitable,
- lending is increased,
- pounds are worth less
- exports rise
- imports stay expensive helping the balance of payments.