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Confidence? It’s in short supply at the Bank of England | Phillip Inman

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There is a school of thought that says central banks, after a decade of running scared, have found their mojo again.

Their anxiety stemmed from the 2008 crash, when banks panicked in the wake of the US sub-prime property crash and drained the financial system of funds. Only the central banks could make up the difference – with a lending programme known as quantitative easing – and it has been the same story ever since.

Each time central banks attempted to reinvent the old order, hinting that interest rates might inch back towards 2% or even the old normal of 4% to 5%, investors took fright, forcing a U-turn. On several occasions, including at the start of the pandemic, even more publicly insured money was injected into financial markets to preserve the bedrock of the capitalist system.

It became almost a joke in the Square Mile that when financial markets wobbled, Bank of England officials would print more cash, offering it at almost zero interest…

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