Quantitative easing boosted by £75bn by Bank of England

Most economists had expected the monetary policy committee (MPC) to delay a decision on more QE until next month The Bank of England has taken action to kickstart Britain’s flatlined economy by pumping another £75bn into the banking system, more than economists had expected. Faced with growing warnings of a double-dip recession and a eurozone crisis, the Bank is setting aside fears about high inflation to increase its programme of quantitative easing (QE). Most economists had expected the monetary policy committee (MPC) to delay a decision on more QE until next month when it will have its newest forecasts for growth and inflation. But market players had said the decision would be very finely balanced given the latest downbeat economic data , including news this week that the economy virtually ground to a halt in the second quarter. MPC members themselves had also indicated they could act sooner rather than later if there were fresh signs of growth tailing off. The Bank also left interest rates on hold at their record low of 0.5%. The latest move raises QE programme to £275bn. QE effectively puts money into the markets through asset purchases, mainly of UK government bonds, made by the Bank of England. Between March 2009 and January 2010 it bought £200bn of assets, equivalent to about 14% of GDP to help breathe life into the UK economy following the credit crunch. More details soon Quantitative easing Economics Interest rates Bank of England Katie Allen guardian.co.uk

Posted by on October 6, 2011. Filed under News, Politics, World News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.