May 7, 2009

BOE to extend money printing program

The Bank of England said Thursday it would increase its program of printing money by $75 billion to pump more money into the economy.

The practice of printing money involves purchase of corporate and government bonds, essentially IOUs form the Treasury and business, The Times of London reported.

The bank, which has already invested about $70 billion into the program, said it would extend the quantitative easing scheme for three months. The bank's key, bank-to-bank interest rate would remain at the record low of 0.5 percent, the lowest rate in the bank's 315-year history, The Times said.

The bank's Monetary Policy Committee said the economy's pace of decline has begun to moderate, but warned the global economic picture remains in deep recession.

World productivity was expected to drop precipitously, the committee said.