Time is running out, and measures are becoming desperate. The Governor of the Bank of England, Mervyn King, announced on Tuesday the possibility of ‘printing money’, after which monetary policy will no longer have relevant instruments in the fight against the economic crisis.
The interest rate, one of the most important tools of monetary authority, has practically reached zero percent and ammunition is running out. King stated that the Bank is preparing for ‘quantitative measures’, that is, injecting money into the economy by purchasing bonds from banks, companies, and the government treasury. Thus, practically non-selective distribution of money to all entities in the national economy. Although he warned of the possibility of such a drastic measure, equivalent to printing money, King claims that this is currently just an option being considered: ‘I emphasize that we have not yet reached that point,’ he said. The recession in Britain is gaining momentum, and it is estimated that the figures will show 100,000 lost jobs last month, bringing the total number to two million. In addition, the expected GDP decline will be 1.5 percent, which is the worst decline in the last 30 years. According to King, the key problem remains clogged lending and insufficient circulation of money from banks to the market.
