As the UK economy has only slowly recovered from the recession, it is no surprise that there. Are now more calls for money printing. We said here that QE was going to get to over £300 billion once the programme was started and remain of that view.
The really bad part to this news though is that with more QE the UK is going to get stuck in a permanent recession just like Japan. For if the UK is to stick to it's word this is going Tobermory £300 billion of stimulus to take out of the economy one day which will limit any growth potential.
Also of course we have interest rates at 0.5% and one day these are going to have to rise. Yet the longer we have these record low rates the more debtors get used to it and the less saving gets done by znyone or any business.
These two positions added together will mean the the UK is unlikely to ever recover in a substantial way economically in the forseeable future; instead the best we can hope for is the Japan experience of scelrotic growth with regular recessions.
It is a pretty bad situation with no easy solution, however, digging the whole deeper with more QE is definitely not the answer (note, selfishly as I am invested in the markets more QE will be good for the FTSE so I may be happy at the time when it happens, but that is short-term interest only).