Quantitative easing 'likely to be extended'

An economist has predicted that the Bank of England will increase its quantitative easing programme next week.

Vicky Redwood of Capital Economics said that the Bank’s Monetary Policy Committee (MPC) will probably announce an additional investment of £25 billion.

Quantitative easing, which is the modern-day equivalent of printing money, was introduced in the UK earlier this year as a means to boost lending in the economy.

The MPC made the £125 billion investment in March, at the same time that it decided to cut the Bank’s interest rate to the historic low of 0.5 per cent.

Ms Redwood said that the programme will ’probably’ be extended next week, adding that the Bank could even end up investing more than her estimate of £25 billion.

’Quantitative easing so far appears to have had very limited effects and there are still limited signs that the economy is recovering at a strong pace and there is still scope to do more,’ she explained.

Interest rates are likely to be kept at 0.5 per cent, the economist concluded.
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