socialmedian: Quantitative easing set to be extended as business lending slumps

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Quantitative easing set to be extended as business lending slumps

Source: The Guardian

Oct 29, 2009

Summary

• Quantitative easing expected to be extended in November
• Lending down £14.6bn in October
• Consumers still repaying debt

The likelihood of the Bank of England next week extending its controversial £175bn money printing programme increased today after figures showed a record fall in bank lending to smaller businesses.

The Bank's own figures also showed that consumers paid back unsecured borrowing for the third month running, adding to fears that the banking system needs another cash boost.

Following last week's weak third quarter gross domestic product figure, analysts said the Bank of England was now more likely to flood the economy with another £25-50bn in its so-called quantitative easing programme. It has already injected £175bn into the system since starting the scheme in February.

Threadneedle Street officials have long maintained that they expect QE to boost money-supply growth, in particular lending to non-financial companies. But they have also acknowledged that the funds may have had a greater impact on things like the stockmarket and other financial as

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