February 9, 2012 | Author

Author Alec Hanson

The Bank of England has decided that the economy needs some further boost and today decided to increase the size of the Asset Purchase Programme by a further £50 billion, taking the total amount of this ‘Quantitative Easing’ to £325 billion.

The Banks’ Monetary Policy Committee also voted to maintain the official bank rate at 0.5% – maintain the historical low in interest rates introduced back on 5 March 2009.

The decision by the Bank is more than likely due to the underlying pace of the recovering slowing in 2011, with the final quarter showing a fall in activity.

Although there have been some positive reports in various business surveys on the outlook during 2012, the pace of the UK’s main export market expansion and drag of tight credit is keeping the economy in an uncertain position.

“Despite overall signs that activity picked up in January after GDP contracted 0.2% in the fourth quarter of 2011, the economy is far from out of the economic woods and it continues to face major obstacles to developing sustainable, decent growth,” said Howard Archer, chief UK economist at IHS Global Insight.