IMF cuts the UK GDP growth outlook this year and next – prediction of a near £500bn BoE balance sheet by year-end doesn’t look so silly now

The IMF has published an update to their World Economic Outlook today, and it makes for pretty grim reading for the UK.

The heady days of growth at 0.8% in 2012 and 2% in 2013 have been slashed all the way to 0.2% and 1.4 percent respectively:

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Which means that the idea that the latest £50bn increase to the balance sheet of the Bank of England is its last, is just wishful thinking. Back at the start of February this year we wrote a note about ex-BoE member, David Blanchflower, saying he thought that the BoE would print an additional £225bn in 2012 – this was back when the QE portion of the balance sheet of the BoE was £275bn – meaning that Blanchflower was looking for the balance sheet of the BoE to exceed £500bn by the end of the year.

Since February we’ve now had two rounds of money printing both at £50bn a piece taking the balance sheet at the BoE to £375bn – after todays downgrade in the growth in the UK we’re probably now looking at another £75bn-£100bn sometime in October/November, taking the balance sheet to £450-475bn by the end of the year.

So how does all this money printing compare to the other central banks?

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That’s right – the Bank of England has been the biggest printer on the planet… bar none.

But what is scary is that now that the IMF has cut the outlook for 2013 as well, this all but guarantees that the expansion of the balance sheet at the Bank of England will be expanding all throughout 2013 as well – in fact as we’ve said on previous occasions, the global money printing simply will not end this side of the ‘big financial reset’.

Incidentally the title for the IMF report is “New Setbacks, Further Policy Action Needed“. With think a diagrammatical title like this would’ve been much more appropriate:

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Related posts:

1. British Chambers of Commerce slashes UK GDP and calls for more money printing by the BoE
2. UK PMI: Growth at “near-stagnation” – will the BoE print this week?
3. Bank of England see CPI inflation falling to target by the end of next year… possibly/maybe
4. Money printing trifecta complete: ex-BoE Blanchflower calls for more QE
5. GFMS forecasts the gold price to break $2000 before the end of the year

Link to this article: : http://www.goldmadesimplenews.com/gold/imf-cuts-the-uk-gdp-growth-outlook-this-year-and-next-prediction-of-a-near-500bn-boe-balance-sheet-by-year-end-doesnt-look-so-silly-now-7339/

Posted by Thomas Paterson on Jul 16 2012. Filed under Gold and Silver Media, Gold News, Markets. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.