{"id":2819,"date":"2009-07-02T13:17:04","date_gmt":"2009-07-02T13:17:04","guid":{"rendered":"https:\/\/mmm.9dotdigital.ca\/?p=2819"},"modified":"2025-03-27T15:48:52","modified_gmt":"2025-03-27T15:48:52","slug":"more-hopeful-signs-from-latest-uk-credit-survey","status":"publish","type":"post","link":"https:\/\/mmm.9dotdigital.ca\/?p=2819","title":{"rendered":"More hopeful signs from latest UK credit survey"},"content":{"rendered":"<p>Today&#8217;s <em>Financial Times<\/em> contains another downbeat <a title=\"http:\/\/www.ft.com\/cms\/s\/0\/1b87b384-666b-11de-a034-00144feabdc0.html\" href=\"http:\/\/www.ft.com\/cms\/s\/0\/1b87b384-666b-11de-a034-00144feabdc0.html\" target=\"_blank\">article<\/a> about the UK&#8217;s QE. One fund manager quoted is disappointed that no effect on RPI trends is yet apparent. Since the latest RPI number refers to a period only two months after QE started, while monetary changes typically take two years to have their full impact on prices, this might be considered unsurprising.<\/p>\n<p>Another interviewee correctly links an assessment of the success of QE with money supply figures. Unfortunately, he proceeds to ignore the recent broad money pick-up, referring instead to weakness in bank lending to non-financial corporations. Money and credit are routinely confused in discussions of QE, with few commentators aware that money leads the economy while credit lags.<\/p>\n<p>Contributors to the <em>FT<\/em> article may not have read the Bank of England&#8217;s excellent explanation of the aims and mechanics of QE, available on its <a title=\"http:\/\/www.bankofengland.co.uk\/monetarypolicy\/assetpurchases.htm\" href=\"http:\/\/www.bankofengland.co.uk\/monetarypolicy\/assetpurchases.htm\" target=\"_blank\">website<\/a>. As well as expanding QE to &pound;150 billion at next week&#8217;s meeting, the MPC might consider stepping up its education programme.<\/p>\n<p>Further evidence that QE is beginning to work is provided by the Bank&#8217;s second-quarter <a title=\"http:\/\/www.bankofengland.co.uk\/publications\/other\/monetary\/creditconditionssurvey090702.pdf\" href=\"http:\/\/www.bankofengland.co.uk\/publications\/other\/monetary\/creditconditionssurvey090702.pdf\" target=\"_blank\"><em>Credit Conditions Survey<\/em><\/a> released today, showing that a majority of banks made more credit available to mortgage borrowers and companies over the last three months, with a further improvement expected this quarter.<\/p>\n<p>The results of similar surveys in other major economies are usually expressed in terms of the net percentage of banks tightening rather than loosening credit. When the Bank&#8217;s survey is converted to the same format, the UK results compare favourably &ndash; see chart for corporate lending responses. This reflects the combined impact of QE and lending commitments made by the Lloyds Banking Group and the Royal Bank of Scotland as a condition of their participation in the Asset Protection Scheme. (The UK is the first country to publish a second-quarter survey.)<\/p>\n<p><span class=\"full-image-block ssNonEditable\"><span><img decoding=\"async\" src=\"\/storage\/chart8.gif?__SQUARESPACE_CACHEVERSION=1246550619983\" alt=\"\" \/><\/span><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Today&#8217;s Financial Times contains another downbeat article about the UK&#8217;s QE. One fund manager quoted is disappointed that no effect on RPI trends is yet apparent. Since the latest RPI number refers to a period only two months after QE started, while monetary changes typically take two years to have their full impact on prices, [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-2819","post","type-post","status-publish","format-standard","hentry","category-money-moves-markets"],"_links":{"self":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/2819","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2819"}],"version-history":[{"count":1,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/2819\/revisions"}],"predecessor-version":[{"id":5128,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/2819\/revisions\/5128"}],"wp:attachment":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2819"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2819"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2819"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}