Bank of England

Bank of England adds STG25b to economy6/11/2009 8:31:29 AMPound sterling notes The Bank of England announced Thursday that it will pump another STG25 billion ($A45.43 billion) into the recession-hit economy, after it held interest rates at a record low. "The BoE's Monetary Policy Committee today voted to maintain the official bank rate paid on commercial bank reserves at 0.50 per cent," the central bank said in a statement. "The committee also voted to continue with its program of asset purchases financed by the issuance of central bank reserves and to increase its size by STG25 billion to STG200 billion ($A363.4 billion)," it added.
The asset purchase program is more commonly referred to as quantitative easing. Under QE, the British central bank buys bonds from commercial institutions to try and boost lending to businesses and individuals. The BoE added on Thursday that it would take three months to complete the additional asset purchases, while the scale of the program would be kept under review. The central bank also noted mounting signs of a tentative global economic recovery in a statement explaining its decision. "The world economy has shown signs of recovery, with a number of emerging market economies experiencing a strong rebound in growth, although global activity as a whole remains significantly depressed," the BoE said. "Asset prices have risen internationally since the spring, reflecting both the gradual improvement in the economic climate and accommodative monetary policies. "And banks' funding conditions have improved, though financial conditions remain fragile."