Please can someone explain the news about the B of E making money...?

[singalongamumum]

Do they just mean printing it? Or actually just saying 'ok, so now we've got a few billion more than we did before'...? If so, how is that possible and doesn't it just make a mockery of everything in the financial sector?

Sorry for ignorance

The BoE are not physically printing £5 notes all they do is just add a few £100 billion in their computer system and then use that to go out and buy Govt bonds. The money they spend buying Govt bonds goes to the Govt or to investors who own the bonds and then Govt or the invetsor goes and spends the money. That helps businesses make sales they would not otherwise make and helps consumers because it keeps them in work earning a wage.

To be honest the underlying idea is to create a bit of inflation in the economy and stop us slipping into a delfationary depression.

I wish I coud just a a few billions to my bank account like the BoE can.

Thanks- that's amazing! I had no idea that they could do that. Seems completely odd to me, but I can see that it'll help the country.

I am now tempted to phone my bank and tell them I've decided to increase my balance in line with the BofE in order to pull the country out of the recession, just for a laugh... !

Read this morning that most of the people who are selling the government bonds are foreign investors, thankful for the chance to offload their investments in this failing country. Thus, all this lovely new money, which is meant to boost the UK economy, is going straight overseas!