Bank of England pumps extra £25bn into economy

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The Independent Online

Rate-setters elected to pump an extra £25bn into the economy today amid concerns over the UK's faltering recovery.

The Bank of England voted to boost its quantitative easing (QE) programme, which is aimed at increasing the money supply and helping the economy, bringing planned spending to a total of £200bn.

At the end of a two-day meeting, the Monetary Policy Committee (MPC) also chose to keep interest rates at their record low of 0.5 per cent.

The decision will partly appease economists who had called for a hike of up to £50 billion in QE in the wake of disappointing UK figures.

Pressure for steep acceleration of the programme was sparked after a surprise 0.4 per cent decline in the economy between July and September, indicating the UK remained mired in recession, despite news that other countries were beginning to shrug off their downturns.

Major world economies including the US, France and Germany have emerged from recession in recent months, leaving the UK behind and intensifying calls for further action from officials.

Figures showing a 0.9 per cent decline in the Bank's preferred measure of money growth in September also raised uncertainty over whether the current level of QE was sufficient.