Proposals for new quantitative easing rejected

The Bank of England has voted not to inject any more cash into the economy through its quantitative easing (QE) scheme, it was revealed. Having put £375bn into the economy in an attempt to stimulate growth over the last few years, the Bank decided the scheme didn’t need to be expanded further. Interest rates also remained unchanged at 0.5% although, with no change having occurred since March 2009, this was always likely. An improvement in the services activity during January, together with better retail sales and economic performance across the euro zone, were likely to be factors in the Bank’s reluctance to further stimulate the economy through QE. Soon-to-be Bank Governor, Mark Carney, suggested he was willing to consider alterations to the UK’s monetary policy framework when he takes up the position in July, replacing Sir Mervyn King. The Organisation for Economic Co-operation and Development (OECD) said the Bank would need to input more money into the economy if growth continues to be weak, although the effectiveness of QE as a stimulation policy has been questioned by many.