Positive Money response to Theresa May’s comments on quantitative easing

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London, 5th October 2016

In response to Theresa May’s keynote speech at the Conservative conference, in which she signalled a change in the government’s approach to monetary policy, Executive Director of Positive Money, Fran Boait said:

“We welcome Theresa May’s confirmation that QE has had harmful side effects which her government will seek to address. But she needs to clarify what she means, and what action she intends to take.

We want to see an end to QE in its current form as soon as possible. It has been a key driver of inequality, it is exacerbating the housing crisis and it has become ineffective at meeting its objective of stimulating demand.

Theresa May’s government should create the framework for alternative monetary policy tools which boost the economy without the negative side-effects.

We need a new relationship between monetary and fiscal policy. Instead of using new money to inflate asset prices, it should be channeled into the real economy via investment in infrastructure, housebuilding, or a cash payment to citizens.

It is in Theresa May’s power to create a fairer, more effective monetary policy without compromising the Bank of England’s independence. Her remarks on QE are welcome. She should now put them into action.”

Notes

About Positive Money

Positive Money campaigns for a fair, democratic and sustainable money system. Set up in the aftermath of the financial crisis, we are a not-for-profit company funded by small donors, charitable trusts, and foundations.

Fran Boait, Executive Director of Positive Money is available for interviews. Please contact David Clarke at david.clarke@positivemoney.org.uk or 02072533235 / 07849598558 for more details.

Theresa May’s comments

Follow this link to see her comments on QE.

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