The BoE has cut interest rates for the sixth time since October 2008 – by half a point to 0.5%. Business groups, such as the Federation of Small Businesses have criticised the recent cuts as doing little to boost bank lending.
In an attempt to stimulate the UK economy, the bank will increase the amount of money in circulation by £75 billion. But rather than print new money, the bank will introduce ‘quantitative easing’ for the first time in the UK. Quantitative easing, involves the buying of assets, such as government securities. The BoE will borrow the money to make these purchases.
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