Alistair Darling came under fire for not having given any details of how the economy will emerge from quantitative easing. LibDem MP Colin Breed asked: “Don’t you think market confidence might be improved if there was some clear idea of what the exit strategy is?”
Darling said the BoE could choose to put up interest rates and this was “the most obvious and easiest thing to do”.
He added: “In terms of the broader exit strategy, it would need to discuss with the Debt Management Office how it withdrew from its operations. You would want to do that in an orderly manner so the markets could cope.”
When asked if he was confident of selling the huge amount of gilts now required to keep pace with national debt targets, Darling said there was a healthy appetite for gilts as they are comparatively longer-dated than many of the European gilts on the market at present.