Bank injects a further £50 billion into the economy

04/07/2012

By Marcus Leach

The Bank of England (BoE) have confirmed that they will inject a further £50 billion into the UK economy in a bid to boost demand.

The quantitative easing (QE) programme has now seen the Bank pump £325 billion into the economy.

The Bank also said it would leave UK interest rates unchanged at 0.5%

“Over the past month, it became increasingly clear that a further round of asset purchases was imminent," Dr Neil Bentley, CBI Deputy Director-General, said.

"Inflation has fallen faster than expected, economic momentum appears to have slowed both in the UK and globally, and the MPC had done little to dampen expectations.

“This extension of QE should provide a fillip to confidence, but with gilt yields already at low levels, the direct impact may only be modest, and consideration should also be given to investing in a broader set of assets, for example bank bonds and high-grade corporate paper.

“However, when combined with the measures announced at the Mansion House, this additional QE will provide some support to business at a difficult time.”

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