Quantitative easing set to be extended according to reports
The Daily Mail has reported that the Bank of England is set to extend its quantitative easing (QE) scheme by as much as £25 billion next year.
QE, also known as printing money, is a process whereby the Treasury injects funds into the financial system to ease pressure on banks by giving them extra capital.
In November, the Bank announced that it would pump another £25 billion into the economy under its QE programme.
The amount was in addition to the £175 billion of support already provided.
In order to press ahead with a further round of QE, the Bank would have to seek approval from Chancellor Alistair Darling.
In his Pre-Budget Report, the Chancellor said it was too early to withdraw all support for recovery.
In an interview with the Daily Mail published yesterday, newest member of the Monetary Policy Committee (MPC) member, Adam Posen, said quantitative easing appeared to have been successful.
However, all will be revealed at the next MPC meeting on January 7.