Cameron & Osborne are now betting on a bail out from the Bank of England

Ed Balls MP, Labour’s Shadow Chancellor, said in response to the Bank of England’s decision on a further £75 billion of quantitative easing:

“With our economy stagnated since last autumn David Cameron and George Osborne are now betting on a bail out from the Bank of England.

“The Government’s reckless policy of cutting spending and raising taxes too far and too fast is demonstrably not working. But rather than change course the Government has spent the last week urging the Bank of England to step in and essentially print more money. The Bank of England has been left with no choice but to step in and try to offset the contractionary effects of George Osborne’s Budget plans

“This is the Bank of England’s contribution to a Plan B. But while another round of quantitative easing may help, I fear it will do little to create the jobs and growth we desperately need if we are to get the deficit down. When monetary policy is already so loose – with interest rates at record lows – and with confidence depressed this is, as Keynes said, like pushing on a string.

“What we really need is a change in fiscal policy from the Government – getting the deficit down in a steadier and more balanced way with a credible plan to get the economy moving again, like the five point plan for jobs Labour set out last week.

“Two years ago George Osborne described quantitative easing as ‘the last resort of desperate governments’. Today he is desperately hoping it will bail out his failing economic policy.”

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Posted October 6th, 2011 by Ed's team