For the 85th month in a row, the Bank of England has voted to keep interest rates at a low of 0.5 percent. Along with the European Central Bank and U.S. Federal Reserve, it remains wedded to the idea that low interest rates, together with the mass printing of money (quantitative easing or QE), will heal the economy. But, with the global economy faltering, governments and central banks across the world are under growing pressure to change course.
The emerging consensus is that the monetary medicine used to save economies after the 2008 crash may have helped prevent further economic meltdown, but it has failed to build a sustainable recovery. Much of the European continent remains locked in stagnation and the U.K. economy is running out of steam, while there is tangible fear of a new era of deflation. As a recent Economist newspaper front cover asked: is the world economy “out of ammo?”
