Bank of England prints another £25 billion

The Bank of England’s Monetary Policy Committee voted as expected to leave interest rates unchanged at 0.5%.

However Quantitative Easing was expanded by £25 billion to take the programme to £200 billion of money created to buy debt.

This was less than many expected and in the accompanying statement the Bank of England were slightly more upbeat on a pick up in economic activity and the market has taken the perception that we will now see at the very least a pause in the programme.

This changes the perception towards exit strategies and to a more hawkish tone…this has given sterling a boost even in the light of the decision to expand QE. The market is looking forward and the prospect of the next quarter showing the UK economy returning to growth and the halting of further QE.

The markets however remain very fickle and this sentiment could change very quickly.

Yesterday UK manufacturing rose 1.7% above expectations and Industrial Production climbed- again supportive of the sentiment that the worst is behind us.

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