BoE pumps further £50bn into economy through QE

6 July 2012

The Bank of England (BoE) has announced it is extending its quantitative easing (QE) programme.

An additional £50 billion is to be invested through this measure, which takes its asset purchasing programme up to £375 billion.

The reason for the move is that over the past 18 months, there has been barely any growth in the UK and this pattern seems set to continue in the coming months.

According to the Bank, concerns remain "about the indebtedness and competitiveness of several euro-area economies" and this in turn is affecting confidence.

The soon-to-be launched Funding for Lending scheme should make a difference for the banking sector and its creation has been welcomed by the Monetary Policy Committee.

It went on to note "a gradual strengthening of output growth" will be viewed thanks to moves introduced to reduce liquidity restraints.

The Bank also confirmed interest rates are being kept at 0.5 per cent for the 41st consecutive month.

By Tony Aynsley

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