Now the Bank of England needs to deliver QE for the people

We propose that the government legislates to empower the Bank with the ability to make payments directly to the household sector

For all the talk of policy change now that the Liberal Democrats have imploded, a strong continuity runs between the economic policies of the new government and its coalition predecessor in their shared belief that monetary policy can do all the heavy lifting. In short, "Rock Star" central banker Mark Carney can create growth with monetary magic, leaving fiscal policy to ignore cyclical conditions and focus on deficit reduction.

This lopsided approach to policy has an inbuilt liability. If everything rests on the monetary magic of the Bank of England, what happens if the Bank runs out of tricks? Interest rates are close to zero, the yield curve is relatively flat, and the banking system is already flush with liquidity. Given our experience with "unconventional policy" to date, there are growing concerns that more of the same negative interest rates or further bouts of quantitative easing (QE) may cause more problems than they solve.