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Bank of England to print another $25bn

The Bank of England Monetary Policy Committee has voted to keep the rate it pays commercial banks on their reserves with the bank of England at 0.5%.

It has also decided to massively increase how much money it prints, with its asset purchases (buying gilts as a way of printing money), to pump an extra £25b into the moribund UK economy.

The policy is definitely inflationary, and should be positive for markets, but it has not had a huge effect on the market as both decisions were expected, and are widely regarded as necessary to get the UK out of recession. We may well, as over the last year, see markets move up as the money is actually invested, however, this time, many other countries are emerging from recession and moving away from inflationary policies.

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