Surpise QE boost ‘guarantees' more stimulus next February

The Bank of England's surprise decision last week to increase its quantitative easing programme by £75bn will lead to further stimulus in February, according to economists.

The Bank of England’s surprise decision last week to increase its quantitative easing programme by £75bn will lead to further stimulus in February, according to economists. The BoE expanded its asset purchase scheme to £275bn in a bid to kick-start the UK’s ailing economy, and held rates at their historic low of 0.5%. The move shocked markets, with both sterling and gilts sharply falling following the announcement, as many investors had expected governor Mervyn King to hold fire on more QE until November. Thomson expects King will move to add a further £75bn of QE next February, as...