Chancellor Philip Hammond will present his first Autumn Statement to Parliament on November 23. Credit Geoff Pugh
Amajor shift in economic policy away from quantitative easing is expected to be announced in this year’s Autumn Statement, according to reports.
Theresa May is said to be backing a break away from the monetary policy pursued by George Osborne and a move towards more fiscal measures, such as tax and spending.
George Freeman, the Conservative MP who chairs the No 10 policy board, confirmed that the change would be announced in next month’s Autumn Statement.
Speaking on Wednesday night to BBC Newsnight, he suggested the policy could be unveiled by the Chancellor Philip Hammond as early as the Autumn Statement.
It comes after Mrs May criticised the “bad side effects” of quantitative easing during her speech to the Tory Party conference.
Mr Freeman told Newsnight: “Philip Hammond is going to set this out in the Autumn Statement, but Theresa has been very clear this model of the emergency QE package, bail out the banks, stabilise the economy, has had a very profound effect on distribution of wealth.
“Those with assets have done very much better than those without. We have to listen to the roar that we heard this year.”
Mr Freeman said the Government was “looking at all the mechanisms to make sure money flows properly”, in order to develop infrastructure and its industrial strategy.
Quantitative easing, which introduces new money into the money supply through a central bank, was done in the wake of the 2008 financial crisis.
Mr Freeman added: “We are asking the question. If we’re going to build a model of economic growth that’s more urgent, creates more opportunities, creates for people hope that through this pain of getting out of this debt crisis there is growth and sustainable growth for tomorrow, and that the people and places that have been left behind can see infrastructure and opportunity.
“She’s signalling loud and clear that we need to make sure we understand what effect this model of growth has had on those that are paying for it.”
Monetary policy is set by the Bank of England, which is independent of government.
On Wednesday Mrs May told an audience in Birmingham that a change in economic direction had “got to come”.
She said: “While monetary policy – with super-low interest rates and quantitative easing – provided the necessary emergency medicine after the financial crash, we have to acknowledge there have been some bad side effects.
“People with assets have got richer. People without them have suffered. People with mortgages have found their debts cheaper. People with savings have found themselves poorer.”