I can't see interest rates rising much until the levels of government borrowing have gone down.

High inflation will cause interest rates to rise. Investors wouldn't put enough money into bank savings accounts otherwise as there are too many alternative places to put money where the investment can be expected to match inflation. It's all a balancing act.

Twee:

As for inflation - in the past, inflation has required a raised interest rate - but not this time - please explain ........

My understanding that raising interest rates is a monetarist way of trying to reduce spending. i.e if people are faced with paying higher interest, they won't spend/borrow as much. But they can't do this when the economy is in such a poor state and most of the inflation is from things beyond the control of people/governments e.g. energy prices.

What concerns me is if the economy does go "belly up" and financial institutions start failing - how will the savings (supposedly underwritten by the government) be repaid ?

Using the BOE's XEROXed pound notes ?

How long will these be accepted by the rest of the world ?

I can see turmoil ahead - many people losing their life savings with countless others keeping theirs in the safest place (under the mattress)

Just my opinion of course

As for inflation - in the past, inflation has required a raised interest rate - but not this time - please explain ........

Never mind BYO, I'm coining a new term: PYO (print your own)!

For anyone wondering what all the fuss is about, you may find our article 'What is quantitative easing?' useful.

Does this mean (even) higher inflation is on the way? Will it work? Will it boost the housing market and increase the amount of money going to small businesses and boost growth? Does it mean more misery for savers?

Graeme
Community Editor
graeme.delap@moneysupermarket.com

They can't keep doing this. The last QE caused some inflation ( I think 1.5% was calculated by some) and it is also said to devalue the currency.

Is there are any real money ?

Not convinced that any of the current politicians in power in Europe know what they are doing. There is zero leadership from anyone. Sarkozy is supposed to be the chair of the G20 at the moment, but with the presidential elections due next year, he is keeping pretty quiet.

Isn't this what Germany tried back in the 20's ?

Printing money to try to get through their economic woes ?

And look what happened to them .......