Investment - Articles - Bank of England adds £50b to stimulus


Azad Zangana, European Economist at Schroders comments:

 “The Bank of England’s Monetary Policy Committee decided to keep interest rates on hold at 0.5%, but to add further stimulus through their asset purchase programme, otherwise known as quantitative easing (QE). The bank will buy an additional £50 billion pounds over the next four months, which will take the total size of the programme to £375 billion.
 
 “The latest to the bank’s quantitative easing programme was widely expected after several comments from Governor Mervyn King that he felt that the economic situation had deteriorated sufficiently to warrant a change action. The policy U-turn comes a mere 8 weeks after the bank decided to extend to extend their QE programme.
 
 “In our view, the additional £50 billion of purchases will do little to stimulate the economy. Gilt yields are close to record lows, leaving little room for a further discount to feed through to banks and households. In addition, banks are still under tremendous pressure to deleverage, restricting the amount of lending they are prepared to do. Moreover, because of the huge uncertainty caused by the Eurozone crisis, there is little appetite for businesses to take new risk and invest in the economy. Against a backdrop of continued austerity, we expect the UK economy to stagnate at best over the next 18-months, and the Bank of England to return later this year with even more quantitative easing.”
  

Back to Index


Similar News to this Story

Inheritance Tax raises almost GBP6 billion in 8 months
December’s update from HMRC shows that Inheritance Tax (IHT) receipts reached £5.7 billion through the first two-thirds of this financial year (April
PIC completes first Mosaic buyin with GCB Pension Fund
Pension Insurance Corporation plc (“PIC”) has concluded its first full scheme buy-in within Mosaic, PIC’s streamlined service for pension schemes with
Airways Pension Scheme complete longevity hedge with MetLife
The Trustees of the Airways Pension Scheme (“the Scheme”), Metropolitan Tower Life Insurance Company, a subsidiary of MetLife, Inc., (“MetLife”) and Z

Site Search

Exact   Any  

Latest Actuarial Jobs

Actuarial Login

Email
Password
 Jobseeker    Client
Reminder Logon

APA Sponsors

Actuarial Jobs & News Feeds

Jobs RSS News RSS

WikiActuary

Be the first to contribute to our definitive actuarial reference forum. Built by actuaries for actuaries.