Good morning, it's Paul here with the SCVR for Weds.

Estimated timings - I'll probably say 1pm, but will actually be finished by about 4pm. That's what usually happens.
Edit at 10:40 - there's already tons written, so my conscience is clear! I'll make a note here when I'm finished, not sure of timings.
Edit at 13:05 - today's report is finished. Broadly in line with the official finish time too!

Copying content onto advfn - please could subscribers refrain from copying content from here onto advfn (or other bulletin boards)? The SCVRs were free for about 6 years, but are now behind the paywall. It's not fair to other subscribers, who are paying to have access to these articles. Many thanks.

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Quantitative Easing

I should emphasise that I'm not an expert in economics. I studied economics at O-Level, A-level, and as part of my Degree, so have a reasonable general understanding only.

The press have recently been publishing often alarmist articles about the explosion in UK Govt debt. This is unfortunate, because the large annual deficits incurred after the 2008-9 financial crisis had been gradually reduced, until almost eliminated. Then covid struck, and we're not just back to square one, we're now in a far worse position of over-spending than in the last crisis.

The unprecedented measures taken to keep the economy afloat during lockdown have been vastly costly - e.g. this article from the OBR (Office for Budget Responsibility) shows how Govt borrowing was £103.7bn in just two months. Tax revenues for April-May are down 43% vs LY, and central Govt spending is up 48%. Mind-boggling figures. Borrowing was only £16.7bn in the comparative 2 months LY (last year);

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National debt has now risen to just over 100% of GDP, the first time it has got that high since the 1960s. Although that is based on a reduced GDP figure, adjusted to take into account the sharp economic slowdown due to lockdown. Hence the % should fall somewhat as the economy recovers.

The Govt has to borrow from bond markets (by issuing Gilts) in order to finance this deficit. Conventional economics suggests that borrowing on this scale would trigger very high interest rates (a premium return required by investors, in order to take on the risk of lending money to a profligate Govt). However,…

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