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Quantitative easing 'likely' in near future

Quantitative easing 'likely' in near future

Category: Economy

Updated: 06/03/2009
First Published: 05/03/2009

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The Bank of England is likely to turn to quantitative easing in order to stimulate the economy, it has been suggested.

Interest rate cuts have been introduced by the Bank's monetary policy committee (MPC) over recent months in a bid to offset the risk of deflation - moves that have led to cheaper secured loan rates for some consumers.

However, chief economist for HIS Global Insight Howard Archer stated that alternative action may soon be taken, with the rate now nearing zero per cent.

Quantitative easing would see the Bank of England print extra money or purchase assets from other banks in order to influence the economy.

And Mr Archer remarked: "MPC members have been wheeled out over recent weeks and I think they are definitely paving the ground for quantitative easing."

Secured loans customers are awaiting the announcement of this month's base rate decision, which is due to be made later today, with the rate currently standing at one per cent - its lowest in the Bank's 315-year history.

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