£175Bn of QE - What has the money been used for?

£175Bn of QE - What has the money been used for?

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jesusbuiltmycar

Original Poster:

4,623 posts

260 months

Monday 21st September 2009
quotequote all
Last month UK PLC borrowed another £16.1Bn - a new record for one month.

The total net borrowing for the first 5 months of ths finacial year is now £65.3bn.

It is my understanding that so far this financial year has £175Bn has been 'eased' into the economy.

Where has this money gone? What has it been used for?

I thought it was being used to buy back government bonds from the banks to increase the money supply - if so why hasn't our overall debt fallen?

e.g if say at the start of the fincancial year we owed £1000Bn. If we had borrowed a further £65Bn and bought back £175Bn of bonds the total debt should of been reduced by £110Bn. Why is this not the case?

Or is it a case that without QE we would of needed to borrow an extra £175Bn?

What am I missing?



Digga

41,086 posts

289 months

Monday 21st September 2009
quotequote all
Trouble is, the UK is still accumulating debt; there's interest to pay on the extant principle debt, but there is new debt arriving every month that public sector spending exceeds the dwindling tax receipts from a failing private sector.

FWIW, I reckon the banks have, one way or another, pushed a good chunk of the QE in this direction: FTSE100

Edited for piss poor spellering.

Edited by Digga on Monday 21st September 11:45

chris watton

22,478 posts

266 months

Monday 21st September 2009
quotequote all
Did I hear that the total tax receipts does not even cover the UK's welfare cheque?

If that's right, that is a pretty sad state of affairs!

anonymous-user

60 months

Monday 21st September 2009
quotequote all
chris watton said:
Did I hear that the total tax receipts does not even cover the UK's welfare cheque?

If that's right, that is a pretty sad state of affairs!
That is correct!

jesusbuiltmycar

Original Poster:

4,623 posts

260 months

Monday 21st September 2009
quotequote all
chris watton said:
Did I hear that the total tax receipts does not even cover the UK's welfare cheque?

If that's right, that is a pretty sad state of affairs!
I thought it was total income tax receipts!

From another source:

bbc said:
The government's overall debt now stands at £804.8bn, or 57.5% of GDP, an increase of £172bn in the past year.
So would the increase have been £347Bn without QE?



rypt

2,548 posts

196 months

Monday 21st September 2009
quotequote all
jesusbuiltmycar said:
From another source:

bbc said:
The government's overall debt now stands at £804.8bn, or 57.5% of GDP, an increase of £172bn in the past year.
So would the increase have been £347Bn without QE?
Even the bankers don't understand how the banking system works, do you expect us laymen to understand how it works and how the borrowing etc works?

Bibbs

3,733 posts

216 months

Monday 21st September 2009
quotequote all
I think the debt would have been the same "number" .. but now a pound is worth less, the debt has less "value"