You would imagine that, from what G.Brown is to say to the Trade Unions this week, and what looks to be the successor attack on the Tories after "Labour Spending, Tory Cuts", despite the vast debts he has run up, he still needs more spending. Quantitative Easing must carry on. The Bank of England for the moment is holding off using the extra money creating assets it has been empowered to use.
The Bank's attitude seems to be to wait and see. G.Brown seems to be a primitive Keynesian, "If there's unemployment hit it with spending!" The Bank sees a danger. If institutions are not performing well, pumping in money may actually be counter productive -frightening credit agencies, reducing our rating and pushing up interest rates, as well as even letting the inflation genie out of the bottle.
The Bank is probably right to wait a little longer. As for the Tories, and as they would not be in power until next June, and need time to analyse and decide on policy when they have the information, it could be 18 months before policy of theirs begins to take effect.
How does G. Brown know that at that time the Tories would be pushing us into new recession?
He doesn't. (He claims that recovery us already with us, and there could be a need to encourage saving and discourage credit at that point)He is merely trying to pretend he has the solution. He is desperate!
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