QE on the back seat

We’re now NatWest Group

Come and visit us for all our latest news, insights and everything NatWest Group.


QE on the back seat

The Minutes to Mark Carney's debut MPC meeting were eagerly anticipated. They didn't disappoint. The big surprise was that nobody voted to increase quantitative easing (QE) in July; three members had voted to do so in June.

Economic Analysis

18 July 2013

Does this mean that the printing press has been turned off for good? Not necessarily, but it does suggest that QE will take a back-seat to other policy measures for the time being. The most obvious alternative is “forward guidance”, where a central bank gives guidance about what it intends to do in future about its main interest rate or other aspects of monetary policy like QE.

Forward guidance could be time-dependent, where the bank announces that it will keep interest rates unchanged until a specified date. Or it could be condition-dependent, with the bank saying it will keep policy unchanged until certain conditions are met (e.g. unemployment falls to a specified level). 

For those of you who fear that we cannot talk our way to recovery, fear not. The Minutes also made a teasing reference to "other options". This might mean purchases of other assets, like corporate bonds, or something else altogether. But the message is clear: QE is no longer the only show in town.

Latest news

RBS to help 2.5 million people each year to be more financially capable

RBS has today committed to helping 2.5 million people in the UK each year to improve their financial capability.

RBS to increase lending to sustainable energy sector following £1.1bn securitisation of loans to UK sustainable energy market

RBS has executed a £1.1bn securitisation deal with Macquarie Infrastructure Debt Investment Solutions (MIDIS), which will allow the bank to recycle capital and increase lending to the sustainable or renewable energy sectors.

RBS launches £1 billion Female Entrepreneurship Funding and announces targets to help create at least 50k new businesses by 2023

RBS has today announced a new £1 billion in funding through NatWest to support female entrepreneurs in the UK to scale and grow – the largest intervention by a UK lender focused specifically on female-led businesses.

We’re now NatWest Group

Come and visit us for all our latest news, insights and everything NatWest Group.

Set Tab for lightbox