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The Bank of England has today announced plans to inject a further £50billion through its quantitative easing programme – a process used to help stimulate the economy by putting more money into circulation.
The new plans will increase total spendings to £175billion, exceeding the £150billion limit first set by the chancellor.
The rate setters said in a statement that the recession "appears to have been deeper than previously thought".
They also made the decision to freeze interest rates at 0.5% for the fifth consecutive month, the lowest rate ever recorded.
A number of people in the markets were surprised by the Monetary Policy Committee's (MPC) decision to expand the programme.
The announcement had a negative effect on the pound, losing recent gains against the dollar to fall by over a cent to $1.6830.
Mervyn King, Bank of England governor, was obliged to ask the chancellor for permission to extend the programme beyond its original £150billion limit, to which Alistair Darling accepted.
Stephen Timms, financial secretary to the Treasury, said he thought extending the programme was the right thing to do.
"I think it's a key element alongside all the other things we've done - the VAT cut; the decision to let companies under pressure put off taxes they owe through the Time to Pay arrangement; bringing forward, as we have done, investment planned for future years into the current year," he said.
"I think what we're seeing is all those measures in combination having the effect that we'd hoped they would have and a growing sense of optimism now that, as we said at the time of the Budget, the economy is likely to return to growth by the end of this year."
The extra money will be spent over the next three months, part of which is to be used to expand the range of government debt the bank is prepared to buy.
The European Central Bank has also decided to keep its interest rates at 1%.
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The Role Of The Commercial Loan Review In Restructuring Agreements
By: Michael Bartonolis | 09/12/2009The commercial loan review has two contrasting meanings for the lender and the borrower when they are attempting to reach an agreement on loan modification. The loan workout is supported by financial regulators, such as the Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve, because they realize that this kind of deal will be beneficial for both parties.
The Basics Of The Commercial Loan Review
By: Michael Bartonolis | 05/12/2009The owner of a commercial property, such as a shopping center, strip mall, apartment complex, office building and multi-tenant building, can collaborate with the bank or lender for a possible commercial loan modification. This adjustment to the commercial loan may result into the reduction of the amount that is due, the temporary payment of interests only, the extension of the duration of the loan, or a decrease in the interest rates.
You really can use ATM'S with no fees
By: Paul Ingersole | 04/12/2009Many people feel that ATMs are a convenience but one that is enjoyed at a price. If you visit an ATM by another bank at least once a day and get charge a two dollar fee each time, you are spending an extra fourteen dollars each week that could be spend on something else. Over the course of a year that adds up to a considerable amount of money. Free ATMs would solve this problem.
Probably the safest ATM machines are those that you can access from your car
By: Paul Ingersole | 04/12/2009But despite the risks, if you are careful, ATMs can be very convenient. Probably the safest ATM machines are those that you can access from your car. It is a lot harder to steal a purse or wallet from a car than it is while being in person. As long as you are safe and careful, ATMs can be perfectly safe.
Are ATM'S safe to use?
By: Paul Ingersole | 04/12/2009ATM machines are a great convenience. They allow you to get your cash twenty four hours a day. This means that if you need money at 2 AM you can have access to it as long as you can find an ATM machine. Unfortunately, the very thing that makes it convenient is also one of the things that can potentially make it unsafe.
Are ATM'S safe to use?
By: Paul Ingersole | 04/12/2009ATM machines are a great convenience. They allow you to get your cash twenty four hours a day. This means that if you need money at 2 AM you can have access to it as long as you can find an ATM machine. Unfortunately, the very thing that makes it convenient is also one of the things that can potentially make it unsafe.
Should we really have to be paying ATM fees
By: Paul Ingersole | 04/12/2009It is important to keep track of your ATM fees if you have a tendency to use ATM machines a lot. If you don’t you could end up spending more money than you actually have in your account. If you have overdraft protection then this really is not that much of a problem.
My Way To Make Money on the Net
By: Amy Tidmarsh | 03/12/2009During the credit crunch many folks are finding it difficult to survive. During these hard times many bosses are not increasing incomes, yet bills continue to rise worryingly. however , the general public have access to the internet these days and there are many paths to earn extra money when you have time to spare. Many of us sell successfully at auction houses such as Ebay and Amazon Market place. You might also opt to complete surveys from numerous websites ...
Yorkshire and Chelsea Building Societies agree to merger deal
By: Sam Gooch | 02/12/2009 | BankingAfter the Yorkshire and Chelsea building societies met to discuss a possible merger yesterday, it has been reported that the two plan to go ahead with the deal to create the second largest building society in the UK.
High interest savings accounts 'could help after Christmas'
By: Sam Gooch | 02/12/2009 | Personal FinanceConsumers who compare savings accounts before Christmas could set themselves up nicely for a happy new year.
Debit and credit card use 'goes up'
By: Sam Gooch | 02/12/2009 | CreditThere has been an increase in the use of debit and credit cards, third-quarter statistics reveal.
The Yorkshire and Chelsea building societies consider merger deal
By: Sam Gooch | 02/12/2009 | FinanceThe Yorkshire and Chelsea building societies are currently in "advanced talks" to consider the possibility of merging.
Credit card use rising once more
By: Sam Gooch | 02/12/2009 | CreditThe popularity of credit cards is up again, according to experts.
Will the interest rate rise affect your credit card repayments?
By: Sam Gooch | 02/12/2009 | CreditThe RBA has decided on a further interest rate hike this month.
ISA myths dispelled
By: Sam Gooch | 01/12/2009 | InvestingDespite some thoughts to the contrary, one writer points out that saving in an ISA is a simple process.
Get 5% cashback on your Christmas spend with Amex
By: Sam Gooch | 26/11/2009 | Personal FinanceSmall businesses are being urged to seek out a bank that will meet their requirements and offer the support they need.