Bank of England to increase its Quantitative Easing stimulus policy by £ 50 billion and keep main interest rate at 0.50%, the Monetary Policy Committee had pumped up the economy with £ 325 billion under its QE stimulus policy since March 2009

The Bank of England yesterday said it would increase its Quantitative Easing stimulus policy by STG50 billion (RM246 billion) to boost Britain's recession-hit economy.

The BoE said it was also keeping its main interest rate at a record low 0.50 per cent following a two-day monetary policy meeting.

"The Bank of England's Monetary Policy Committee today voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5 per cent.

"The committee also voted to increase the size of its asset purchase programme, financed by the issuance of central bank reserves, by STG50 billion to a total of STG375 billion," the central bank said in a statement.

Yesterday, the European Central Bank was expected to cut its main lending rate from its current record-low 1.0 per cent.

"UK output has barely grown for a year-and-a-half and is estimated to have fallen in both of the past two quarters," the BoE said.

"The pace of expansion in most of the United Kingdom's main export markets also appears to have slowed. Business indicators point to a continuation of that weakness in the near term, at home and abroad."

The Bank of England added that "concerns remain about the indebtedness and competitiveness of several euro-area economies, and that is weighing on confidence here" in Britain.

Though not a member of the eurozone, Britain relies heavily on the area for the day-to-day trading of its goods and services.

The Monetary Policy Committee had pumped up the economy with STG325 billion under its QE stimulus policy since March 2009. AFP

Source: www.btimes.com.my