According to the Bank of England’s own figures, the UK’s broad money supply (cash, bank deposits, bonds and commercial paper easily converted into cash, etc.) rose by a massive 14.7% in the three months to the end of July, which straddles the Brexit vote.

So what?

Well, this figure is way ahead of even 2009, when all the QE money-pumping ‘only’ pushed up the money supply by 8.7%.

You’d think that the Bank of England would want to bring this under control.

But no – in its infinite wisdom, the Bank has done just the opposite: after the Brexit result, it cut interest rates and embarked on a new round of money printing.

The Bank’s Monetary Policy Committee probably thought it was being proactive by protecting the country from collapsing into a post-Brexit recession. With the benefit of hindsight, it now looks as though the Bank panicked unnecessarily.

The other week, two leading City institutions, Credit Suisse and Morgan Stanley, revised their economic forecasts upwards for 2016 and 2017.

Both now say they do not expect a post-Brexit recession – confounding the near-unanimous assertions of the establishment in the run- up to the Brexit vote.

It has long been intuitively obvious to us that quantitative easing (’money printing’) doesn’t work – it just inflates bubbles.

Now we have some empirical support from the think-tank Positive Money, which has researched where all the QE money created over the past 10 years has gone.

It estimates that:

  • 37% has gone into financial markets (hence record earnings for those that work in the sector);
  • 40% into residential and commercial property (hence the house price bubble);
  • 10% is accounted for by inflation in the price of goods and services (most of which is counterbalanced by deflationary forces such as competition and improved productivity – which is why we don’t see the huge increase in money supply causing much inflation);
  • and only 13% has found its way into where it’s supposed to go: into real businesses to create real jobs and boost demand for real goods and services.

It’s a similar story in the Eurozone. In March 2015, the ECB began a massive money pumping operation.

Already, it has expanded its balance sheet by €1 trillion, using that astronomical sum to buy up sovereign and commercial bonds and the like from banks, pension funds and other institutions.

Eighteen months later, what has the ECB got to show for its efforts?


The eurozone’s GDP growth in the second quarter of this year was just 0.3 (1.2% annualised). In France and Italy, the growth was zero.

We’ll say it again loud and clear: