6 may 2014, a year and a hay

A year and a day before the british general election, things are looking pretty good for the main governing party, provided they can get over the acute embarrassment of losing badly to ukip in the european elections. This sober analysis is very much based on an increasingly solid economic recovery, which all signs point to continuing, including the rise in house prices that produces consumer confidence and a feel good factor, at least in the large southern belt where they are being experienced. Help to buy is a real contributant to that, but even more outrageous is the bank of england's help, as it continues to pump ever more billions (£375 and counting) into the economy through quantative easing. The governor, mark carney, recently let the cat out of the bag by saying the bank may not, after all, sell all its holdings - effectively mass monetary financing. This is exactly what a whole tribe of commentators, including my good self (see dread the launching of the bad ship qe2, 21 october 2010) have been saying all along is going to happen. There are a slew of long-term negativities associated with simply cancelling this massive loan, not least that the main beneficiaries are large corporates, banks and big asset holders. That the us fed is following the same policy takes the heat off threadneedle street, but doesn't make it any better. Down the line it's a rotten policy that we are all eventually the worse off for, apart too from the government of the day that can pocket the cash and the boost and make hay.