Bank looking to boost economy
News Category: Industry News
Published: 16-Mar-2009
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Having reduced interest rates to 0.5 per cent - a move some UK landlords will have benefited from - the Bank of England is now looking at other ways to boost economic growth.
In its quarterly bulletin, which was released today, the Bank indicated that it is in the process of pouring £75 billion into the economy to try and stimulate an upturn.
One concern is that deflation will take hold if the correct policies are not implemented, and today's update looked at the potential consequences of this.
Apparently, the UK's debt burden could increase, which could result in real mortgage rates going up as prices drop.
"If policy responds sufficiently promptly and decisively employing the full range of conventional and unconventional monetary policy instruments, deflationary episodes should be short-lived," the Bank said.
As well as a study of the dangers of deflation, the bulletin included an analysis of price-setting behaviour in the UK and the thoughts of Spencer Dale, chief economist and executive director of monetary analysis and statistics at the Bank.
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