BoE expected to increase QE by £100bn

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The Bank of England is likely to increase its quantitative easing programme by £100bn to aid the economy as the government cuts spending, the Centre for Economics and Business Research says.

The central bank is also expected to keep interest rates at a record low of 0.5% until at least "late" 2012, it believes. The monetary stimulus comes as the UK gears up for the largest fiscal spending cuts in 60 years to tackle the mounting deficit. While there have been calls from MPC member Adam Posen to immediately implement a further dose of QE, the bond purchase programme was kept at £200bn this month. "We expect the authorities to push the monetary policy levers hard in the opposite direction to the fiscal policy levers," the CEBR says. The CEBR forecasts UK economic gro...

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