The panel discussed the short and long-term consequences of quantitative easing (QE), including: was QE necessary to aid the financial recovery? What might be some of the unintended consequences of QE? And how might QE be masking good growth in the economy?

Leach argued that the upturn in GDP was driven by 3 things:

  1. Firstly the acceleration in money supply growth in 2013;
  2. Secondly the removal of the euro crisis from the top of the news, thereby aiding business confidence; and
  3. Finally, the gradual easing in the squeeze on real incomes.

Despite having been bullish on the UK outlook in 2013-14, he argued that the recovery could weaken in 2015 and had within it the seeds of its own destruction.

Leach was joined on the panel by Roger Bootle, Managing Director at Capital Economics and Andrew Sentance, Senior Economic Adviser at PwC.

The discussion was moderated by Ed Conway, Economics Editor at Sky News.

To view the full State of the Economy conference programme, please click here.

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