Multi-billion-pound hedge fund founder backs Corbyn’s “people’s QE”

Bankers and hedge funds “owe a debt” to previous QE programme, says Paul Marshall

One of Jeremy Corbyn’s key economic policies has won the unlikely support of one of Britain’s most successful hedge fund managers.

Paul Marshall, co-founder of $22bn hedge fund Marshall Wace, said Corbyn’s plan of using so-called “people’s quantitative easing” to fund infrastructure projects could “carry quite a lot of respectability”.

Writing in the Financial Times under the headline “Central banks have made the rich richer”, Marshall said that bankers and hedge funds “owe a debt” to the government’s quantitative easing programme, which caused asset prices to rise.

He said: “It is no surprise that the Left are angry about this, and no surprise that they are reaching out for other versions of QE which do not so directly benefit bankers and the rich.”

He added: “In the UK, QE increased the money supply by £375bn, or about £5,800 per person. If this money had been distributed evenly it might have been frittered away on consumption rather than making a few rich people richer and bailing out the banks. But it might have been fairer.”

Corbyn’s “people’s QE” is also backed by his shadow chancellor John McDonnell.

“If Corbyn/McDonnell pared back the idea to something they would seek to implement next time the country was in financial crisis, it would carry quite a lot of respectability,”

People’s QE would involve having the Bank of England invest in large-scale housing, energy, transport and digital projects, but it has many opponents, not least in Mark Carney, governor of the bank, and John Cridland, director general of the CBI.

“You can’t print money and borrow endlessly,” Cridland said. “You have to have a soundly based economic recovery.”

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