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Bank of England expands quantitative easing, holds rates steady
November 5, 2009 / 12:12 PM / in 8 years

Bank of England expands quantitative easing, holds rates steady

LONDON (Reuters) - The Bank of England said on Thursday it would expand its quantitative easing program by 25 billion pounds ($41.5 billion) to help kick-start Britain’s recession-hit economy.

<p>A view of Britain's Bank of England in the city of London March 5, 2009. REUTERS/Stefan Wermuth</p>

The increase brings the central bank’s total asset-buying program to 200 billion pounds, the equivalent of more than 14 percent of Britain’s economic output.

The BoE also left interest rates unchanged at a record low of 0.5 percent, as expected.

Two-thirds of analysts had predicted the BoE would expand its asset-buying scheme, but opinion had been split on whether the increase would be 25 billion or 50 billion pounds.

Conflicting signals over the health of Britain’s economy had made this week’s decision a difficult one to call. Britain’s economy contracted unexpectedly in the third quarter, making the current recession the longest since records began more than 50 years ago, but more forward-looking surveys have painted a brighter picture.

Editing by Mike Peacock

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