Bank of England Asset Purchase Program (APP) Expanded by Another GBP 50 Billion
February 9, 2012
The Bank of England’s APP has been raised from GBP 275 billion to a new ceiling of GBP 325 billion, which will be met by late April, that is within three months. The Bank Rate, 0.5% since March 2009, was left unchanged. A new quarterly Inflation Report will be released on February 15, and minutes of this month’s meeting arrive on February 22.
A statement from officials projects a sharp decline of CPI inflation ahead as various factors like the January 2011 VAT increase fall out of on-year calculations. The statement concludes that inflation most likely would drop below the 2% target in the medium term unless further monetary stimulus is provided. U.K. growth was nil around the turn of 2011 and 2012. Tight credit conditions and further fiscal consolidation will impose continuing headwinds on the economy going forward. "The correspondingly weak outlook for near-term output growth means that a significant margin of economic slack is likely to persist."
Copyright 2012, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Bank of England
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