QE? Again? But what is it?

Quantitative Easing - what is it?

Maybe we need to remind ourselves, because the European Central Bank is expected to do it today.

The idea would be to pump more money into the stagnant eurozone economy, to encourage spending, investment and growth.

But how is it done?

Here's my explanation from a while ago when the Bank of England tried it.

And here's the Bank's explanation.

Euro scare story

The European Central Bank (ECB) has dismissed a warning from a UK travel company that holidaymakers should be careful of Greek and Spanish banknotes.


The Association of British Travel Agents (ABTA) distanced itself from the warning as well.


Dial A Flight, which organises travel for 450,000 people a year, told its customers in a blog that "anyone holding Greek Euros may find themselves out of pocket" if Greece were to leave the eurozone and stamp, or endorse, its euro notes to identify them as a new currency.


The company suggests there is a risk that other eurozone members might not accept the notes -- whether or not they had been stamped -- and that Spain might be the next to suffer.


Notes printed in different countries are identifiable from a letter at the front of the serial number: Y in the case of Greece and V for Spain.


But a spokesman for the ECB said "euro banknotes are legal tender in all euro nations" and that they remained legal tender "wherever they are printed".


ABTA said that while no one knows what would happen if Greece left the euro, "A euro is a euro - it doesn't matter where it is printed".


After I started making enquiries, Dial A Flight removed the blog from its website.


There will be lots of scare stories as Greece's problems persist, but if anyone wants to know what the symbols on euro banknotes mean, the ECB provides a handy guide.


UPDATE - and here's what the British Bankers Association says...

"There is no difference between Euros from different countries. They are worth the same from one end of the Eurozone to the other, regardless of where they are issued. The Euro is a single currency and worth the same whether French, German, Greek or Spanish."

Pound down 31%

UPDATE: pound now buys 1.2241 euros...

It's only three years since the pound sank to near parity with the euro. In other words, a pound and a euro were worth virtually the same amount.

In the wholesale market you could buy just 1.02 euros with each pound at the end of 2008.

So tourists heading for the Eurozone this week will feel a lot more comfortable about the current exchange rate of 1.2155 euros to the pound (update - now 1.2241) - up 19% from the depths of the financial crisis.

(You get a few cents less than that, of course, once money-changing charges are taken off.)

It's worth putting these numbers in a bit of historical context, though, because travellers face a much lower exchange rate than a decade ago - and businesses are still benefiting from a sizeable devaluation in comparison to their Eurozone competitors.

The euro was born as a notional currency in 1999. The pound bought 1.7510 euros at its peak in May, 2000.

Euro notes and coins were launched on New Year's Day in 2002. Even during during that year the pound reached 1.6404.

So sterling is still 26% lower than in 2002 and 31% down on the millennium year, 2000.

Between January 2007 and December 2008, the pound fell by 32%.

According to the ECB (European Central Bank), the average value of the the pound during this period has been 1.4084, substantially higher than the current rate.