The Bank of England has held the bank base rate at 0.5% for the sixth month in a row. It says it will also continue with its £175bn quantitative easing scheme but will not extend it this month.
Recent data has suggested that the UK has begun to climb out of recession. But the Bank has warned recovery would be “slow and protracted” and that it would take months for the full impact of its policies to be felt.
The aim of quantitative easing is to encourage individual banks to expand their balance sheets – moving their reserves into something that offers a higher return, such as making new loans – and so increasing the supply of money in the economy.
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