The Bank of England has injected another 50 billion pounds ($66.271 billion) into the British economy as it extended its quantitative easing program. Its monetary policy committee also opted to maintain its benchmark interest rate unchanged at 0.5%.
The BBC reported Thursday that BoE began its QE program in 2009 in the hopes of stimulating the British economy. Experts expected that the bank would flood markets with another 75 billion pounds, but the figure dropped after stronger-than-expected performance by the manufacturing and service sectors in January.
In a statement, the bank said, “The underlying pace of recovery slowed during 2011, with activity falling slightly during the final quarter. Some recent business surveys have painted a more positive picture and asset prices have risen. But the pace of expansion in the United Kingdom’s main export markets has also slowed and concerns remain about the indebtedness and competitiveness of some euro-area countries.”
BoE also said that if it had not taken the action, inflation would probably drop from its current 4.2% to below its 2% target, as increasing unemployment and dropping import and energy prices continued to fall, and as the VAT, boosted last January from 17.5% to 20%, also fell compared to the previous year.