The Bank of England (BoE) has pumped a further ￡75bn into the economy through its quantitative easing (QE) programme. The BoE is buying up assets such as government bonds in an attempt to boost lending by commercial banks. The latest move follows ￡200bn that was injected in 2009 but the BoE governor Mervyn King has admitted that the process does not guarantee increased lending, instead it will most likely help to reduce the rate of contraction. The return to QE reflects the change in the outlook for the euro and the world economy and the BoE does not feel that it will cause inflation to rise. In fact, the Monetary Policy Committee (MPC) unanimously backed the decision because of the fear that inflation in the longer term was in danger of dropping below its 2% target.
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