Bank Pumps Extra £50bn into the Economy
2 years ago
The surprise move taking efforts to boast the money supply to £175 billion appeared to pour cold water on rising hopes that the UK will bounce back quickly from recession.
The Monetary Policy Committee ( MPC ) ,which left interest rates at 0.5% record low .saw some hopeful signs but flagged up lower spending levels with banks making more profits on the loans they are making
The committee warned : " the need for the banks to continue repairing their balance sheets is likely to restrict the availability of credit,and past falls in asset prices and high levels of dept may weigh on spending.
Its decision comes after 6 billion in combined profits from HSBC and Barclay's last Monday,but losses of £4billion and £724 million respectively from the Lloyds banking group and the Nationalised Northern Rock.
Figure also showed a £14.7 billion fall in loans to businesses between April and June raising questions over the effectiveness of the Banks quantitative easing strategy