Business leaders welcome halt to QE scheme

Feb 5 2010 by Iain Laing, The Journal

NORTH East business leaders have welcomed the Bank of England’s decision to freeze interest rates again and put its quantitative easing (QE) scheme on hold.

The Bank has so far pumped £200bn in newly-created money into the economy after finishing its latest round of assistance last week.

The wait-and-see approach from policymakers also saw interest rates held at 0.5% ... continuing almost one year of record low borrowing costs.

Experts had widely predicted a no-change position from the nine-strong Monetary Policy Committee (MPC) after a surprisingly weak climb out of recession in the final quarter of last year tested resolve.

The UK’s longest period of decline ended with growth of just 0.1% in the last three months of 2009, leading to fears of a so-called double-dip recession.

As a result, some economists predict that the Bank will keep the door open to more QE if the economy continues to struggle.

Recent signs on the economy have been underwhelming, with figures from the UK’s crucial services sector showing slowing growth last month after disruption from the snowy weather.