Quantitative Easing – part 2

Imagine a bank that looks like this (simplified for my benefit as much as anything else!):

It has £100,000 of money on deposit. According to banking rules, each bank is allowed to loan out 90% of the money it holds on deposit. Or to put it another way it must keep 10% of the [...]

Quantitative Easing – part 1

So, here is what seems to be happening in my best layman’s terms. The businesses in our economy are not selling enough stuff because we are not buying enough stuff.

The businesses are not making enough profits and some are even making a loss therefore they decide to cut their costs which in some [...]