Bank of England cuts rate, boosts money supply

March 5th, 2009 - 7:37 pm ICT by IANS  

London, March 5 (DPA) The Bank of England (BoE) Thursday cut interest rates to 0.5 percent and injected up to 75 billion pounds ($105 billion) into the economy through quantitative easing.
The rate cut from one percent was the fifth since last October.

But the focus Thursday was on the bank’s decision to resort to new and unconventional methods by increasing the money supply through quantitative easing - effectively printing money - to improve credit conditions.

The bank said the sum of 75 billion pounds would be pumped into the economy over the next three months to help stimulate lending and consumer demand.

The move was welcomed by analysts in the City of London where, however, an even higher injection of up to 100 billion pounds had been expected.

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