Bank of England No Economic Stimulus

Bank Of England No Economic Stimulus.

Yesterday, the Bank of England held interest rate at 0.5% pa and did not expand the quantitative easing (QE) policy yet again despite calls from many the country to do more to stimulate the flat lining economy.

Already earlier in the week David Cameron had suggested that the Government would not do any more via the QE policy.

Our view

This sends a clear message that to maintain the strength of the pound, the Government and Bank of England will do little more to stimulate the economy.

We see this as a real message that the only way to get things moving is to not use further government borrowing but to use private investor money to develop the economy. How do we think they can do that?

Expand Venture Capital Trusts (VCT) to allow wider investment opportunities without larger tax privileges

Expand EIS Enterprise Investment Scheme and SEIS Seed Enterprise investment scheme as for VCTs above.

Widen investment powers for pension funds, not going as far as allowing residential property, but perhaps other, residential linking projects.

Introduce new investment schemes for business start-ups or widen the loan powers for pension schemes to lend back to businesses.

Improve Entrepreneurs Relief for capital gains tax.