£50 bn is pumped into British Economy by the Bank of England
The Bank of England, London
The bank of England has decided to invest the amount of £50 bn into the economy in order to stimulate the growth of the economy. The recent decision, which is being released over the next four months, will take the total stimulus to further £375 bn.
With a stagnant national economy which is better noticed from the slowing growth in export markets, it is said that the crisis in the eurozone has been leaving the confidence unreliable and weaker in England.
The strategy applied by the Bank of England is to buy bonds from the British Government, which are also called gilts. It is also intentional that in the next months, the UK interest rate would stay unchangeable at a low rate of 0.5%.
One of the concerns of the bank is that the risk of inflation falls below that of the current rate of 2.8%. Nowadays the inflation rate is measured by the Customer Price Index which used to be 5.2% last September.
Although it is important to implement a solution to boost the British economy and keep the interest rate sufficiently competitive to promote a growth in the internal market, it is rather important that the bank is aware what effects may appear after the decision, such as, it said that the pensions for retired people and those ones who intend to retire might get decreased due to the need to demand an economic growth and then they might suffer from a worse rate on their annuity.
By Leonardo Dalmarco de Miranda
With a stagnant national economy which is better noticed from the slowing growth in export markets, it is said that the crisis in the eurozone has been leaving the confidence unreliable and weaker in England.
The strategy applied by the Bank of England is to buy bonds from the British Government, which are also called gilts. It is also intentional that in the next months, the UK interest rate would stay unchangeable at a low rate of 0.5%.
One of the concerns of the bank is that the risk of inflation falls below that of the current rate of 2.8%. Nowadays the inflation rate is measured by the Customer Price Index which used to be 5.2% last September.
Although it is important to implement a solution to boost the British economy and keep the interest rate sufficiently competitive to promote a growth in the internal market, it is rather important that the bank is aware what effects may appear after the decision, such as, it said that the pensions for retired people and those ones who intend to retire might get decreased due to the need to demand an economic growth and then they might suffer from a worse rate on their annuity.
By Leonardo Dalmarco de Miranda