Bank Of England Pause for Thought
05 / Mar / 2010
The Bank of England held fire on both interest rates and quantitative easing yesterday as it paused to assess the impact of the massive stimulus it has already injected into the economy. There was little reaction from financial markets which expect no change in monetary policy until much later this year as the central bank waits for a clearer recovery from the worst economic downturn since World War 2.Britain's economy pulled out of recession at the end of last year, but the strength of the upturn remains in doubt at a time when both the government and the banking sector desperately need to get their balance sheets back in shape. It is now a year since the Bank of England slashed interest rates to 0.5 percent and began buying bonds with newly-created money, quantitative easing in the jargon, in an unprecedented attempt to kick-start growth. The experiment with QE has been regarded as a success by policymakers who say the recession would otherwise have been much deeper.