Bank Stops QE Stimulus amid 'Sluggish Recovery'

By Duncan, Hugo | The Evening Standard (London, England), February 4, 2010 | Go to article overview
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Bank Stops QE Stimulus amid 'Sluggish Recovery'

Duncan, Hugo, The Evening Standard (London, England)

THE Bank of England made a dramatic decision to turn off its printing presses today as it called a halt to quantitative easing.

It said it will not pump any more money into the economy having now injected a staggering Pounds 200 billion to stave off deflation and stop recession turning into depression.

The Monetary Policy Committee also left interest rates at 0.5%.

News from the Bank came as mortgage lender Halifax reported a 0.6% rise in house prices in January -- the seventh successive monthly rise.

The Bank's decision to stop printing money -- at least for now -- marks a change of course after nearly a year of unprecedented emergency support. It has been pumping money into the economy through buying assets such as gilts and bonds since March last year.

The Bank today spoke of a "sluggish" recovery so far but said it would be supported by the money it has already printed, low interest rates, the weak pound and rising demand for exports as the global economy recovers.

It said: "The committee will continue to monitor the appropriate scale of the asset purchase programme and further purchases would be made should the outlook warrant them."

Economists said it would have been difficult for the Bank to print more money today with inflation so far above the 2% target at 2.9%.

But they warned that if the economic recovery falters -- it grew by just 0.

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