Finance: Credit Easing

House of Lords written question – answered on 2nd November 2011.

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Photo of Lord Myners Lord Myners Labour

To ask Her Majesty's Government in what ways they expect credit easing to act differently from quantitative easing.

Photo of Lord Sassoon Lord Sassoon The Commercial Secretary to the Treasury

The purpose of quantitative easing (QE) is to provide the Monetary Policy Committee (MPC) with an additional policy tool to meet the 2 per cent inflation target. Following the MPC's October meetings, the Governor wrote to the Chancellor on 6 October 2011, stating that "in order to keep inflation on track to meet the target over the medium term, the committee judged that it was necessary to inject further monetary stimulus into the economy".

The Government are considering options on credit easing. Such interventions should complement the MPC's QE. The Chancellor will provide more details on credit easing at the autumn statement on 29 November.

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