Bank to pump £75bn into economy

Link to the article: Channel 4

Last Modified: 05 Mar 2009
By: Channel 4 News

The Bank of England slashes interest rates to another all-time low as it starts 'quantitative easing' in a bid to pull the economy out of recession.

The bank's Monetary Policy Committee (MPC) cut interest rates to 0.5 per cent - the sixth month in a row that rates have fallen.

The Bank of England also said it would create £75bn in new money over the next three months under a new quantitative easing strategy.

Under quantitative easing, the bank will create money to buy government and corporate bonds through its Asset Purchase Facility, but the success of the policy depends on how far struggling banks will pass on the extra funds.