CAMERON AND OSBORNE IN U-TURN ON PRINTING MONEY

David Cameron and George Osborne used to be opposed to quantitative easing. Speaking on 9 January 2009 George Osborne, said...“printing money risks losing control of inflation and all the economic problems that high inflation brings. For the Treasury to float the idea carelessly is irresponsible in the extreme as it could shake the confidence of international markets.”

And on 5 March 2009 he said: “I don’t think anyone should be pleased that we have reached this point. It is an admission of failure and carries considerable risk”.

Then on 8 October 2009 David Cameron said: “Sometime soon quantitative easing will have to stop because in the end printing money leads to inflation”

In spite of Osborne’s and Cameron’s previous reticence the Bank of England has announced a further £75 billion of quantitative easing.

Commenting on this develpment Ed Balls MP said: “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 contradictory 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."