Member Article

BoE announce £50bn economic stimulus

The Bank of England has announced plans to inject a further £50 billion into the UK economy through its quantitative easing (QE) programme.

The scheme aims to try and boost demand by buying bonds. The latest round brings the total amount of stimulus to £325 billion.

The Bank have also said it would leave interest rates unchanged at 0.5%. This record low rate has been held for more than three years.

The CBI has responded positively to the decision by the Monetary Policy Committee, which they anticipate will provide a “fillip to confidence”. However, they also have some concerns that it will only have a modest impact.

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

“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.

“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.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .