Source: Xinhua
03-06-2009 10:34
Special Report: Global Financial CrisisLONDON, March 5 (Xinhua) -- The Bank of England, the country's central bank, is expected to announce the circulation of more money and a possible cut in base interest rate to a record low.
The measure, called "quantitative easing," is seen by many as one of the few options for the British government to fight against the deteriorating economic situation in the country, which is seen by International Monetary Fund as one of the worst economies during the current crisis.
The central bank's Monetary Policy Committee is expected to announce it is giving the go-ahead to "quantitative easing" to boost the amount of money in circulation, while Chancellor Alistair Darling is expected to approve the printing of around 150billion pound (about 2120 billion U.S. dollars).
The bank is believed to create the money to buy government and corporate bonds through its Asset Purchase Facility (APF).
Meanwhile, the bank is expected to cut the interest rate by 0.5percent to a record low of 0.5 percent.
The "printing money" policy is seen as the new method of pumping extra money into the system as rates get closer to zero and the central bank runs out of room to stimulate the economy through rate encouragement.
The policy of "printing money" should be carried out now before the slump gets even worse, the Sky News said on Thursday.
Britain fell into recession last year with its economy contract0.6 percent between July and September, and then reduced by 1.5 percent from October to December.
The latest unemployment figures between October to December was1.97 million and the figure is believed to rise to 3 million as the situation goes worse.
Click for more news in Biz China>>
Editor:Qin Yongjing
