News - Economics / markets
Categories: Economics / Markets
George Osborne is set to face tough questions today about the coalition government's economic strategy after the Bank of England expanded quantitative easing by £75bn, a move he has previously called "the last resort of desperate governments".
The Bank today increased its QE programme by a shock £75bn in a bid to kick-start the UK’s ailing economy. Previously only £50bn had been discussed as a possible rise.
It is the first time the Bank has issued QE under the coalition government. The first round - which pumped £200bn into the economy - happened under Labour.
ln 2009 Osborne, then shadow Chancellor, slammed Labour Chancellor Alistair Darling's emergency plan to print more money.
Osborne said at the time: "The very fact the Treasury is speculating about printing money shows Gordon Brown has led Britain to the brink of bankruptcy.
"Printing money is the last resort of desperate governments when all other policies have failed.
"It cannot be ruled out as a last resort in the fight against deflation, but in the end printing money risks losing control of inflation and all the economic problems that high inflation brings."
Also in 2009, Osborne called QE a "leap in the dark".
He told the BBC: "I don't think anyone should be pleased that we have reached this point. It is an admission of failure and carries considerable risk."
The Bank's latest round of asset purchases takes the Bank's QE programme to £275bn as fresh fears surface about the country's stalling recovery amid an escalation of the eurozone debt crisis.
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