Implode-o-Meter News - Exiting QE could 'undermine the recovery', IMF warns

Central banks, including the Bank of England, strayed into "unchartered waters" by cutting interest rates to near-zero and launching billions of pounds of quantitative easing, and they will find the exit "difficult to control", the IMF said. "The market response [to a rise in interest rates] will be less predictable ... possibly for several months or even years."
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The IMF also confirmed earlier work by the Bank that warned of large losses on central bank balance sheets. In a shock scenario, under which rates would need to rise by six percentage points, losses on the current Â£375bn QE programme in the UK could reach 4.5pc of GDP -- or Â£70bn. Even under a "likely case" scenario where rates rose by four percentage points, the loss would be Â£50bn.

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Exiting QE could 'undermine the recovery', IMF warns