The Bank of England voted to inject another 50 billion pounds into the finanical system to try to shore up a fragile recovery in the economy.

Following are analysts' reactions to the decision:


We still doubt how effectively the second dose of quantitative easing in this second course of treatment will boost growth.

The MPC would likely claim growth would have been much weaker without its actions, and cite the subsequent turnaround in the data as evidence of effectiveness, despite there being a coincident global recovery.

Ultimately, we believe much of growth's weakness is structural and thus outside of the MPC's ability to correct.


We still think that QE2 has much further to go.

There is a chance that today's decision was not unanimous, with those members less convinced that inflation will fall sharply, for example Spencer Dale, perhaps voting to keep the asset purchase programme at 275 billion pounds. But clearly they were in the minority.

The big question now is what next week's Inflation Report forecasts will show.

November's forecasts suggested that rather more than 50 billion pounds of extra QE would be needed in order to prevent inflation undershooting its target at the forecast horizon.


It's bang in line with market expectations. To have done anything less would have been to signal that they were putting an end to the programme as they did with QE1.

The interesting commentary is more in the gilt purchase programme itself where they are acknowledging the problems they are having in increasing this programme.

It's not a pushover to continue expanding this programme and the next minutes may show this was not unanimous.


With inflation plunging due to weak corporate pricing power, falling commodity prices and last year's VAT hike dropping out of the annual comparison the Bank of England has considerable room to step up its quantitative easing efforts even further.

Indeed, sterling's 5 percent appreciation on a trade weighted basis since July will intensify the economic trends of weak activity, rising unemployment and falling inflation. Consequently we expect a further 50 billion pounds of QE in May with the eventual size of QE likely to exceed 400 billion pounds and push close to 500 billion pounds in our view.


It's as expected. We had expected a 50 billion increase. There was probably an upside skew in that about a third of forecasters were looking for a larger 75 billion move. But you'd seen the way the market had traded recently, there had been a little bit of a sell-off, a bit of curve-steepening, so some of the expectations for a larger QE injection had been scaled back.

Nothing that I can see in the initial headlines suggests anything hugely surprising.

It looks like the pace of purchases is going to be eased a little bit but there's still this ongoing stimulus and on balance I think they've retained this doveish policy bias.

(It's the right bias because) if they're wrong, and if the recovery strengthens unexpectedly and gains real traction, it's an easier problem to deal with than if the economy falls further into a slowdown.


The Bank has been signalling that a further extension of the asset purchase programme was likely this month.

Even though there are tentative signs that the economy is stabilising, the outlook is still highly uncertain. This new round of QE should help support confidence, though the direct stimulus to near-term growth is likely to be limited.

(Reporting by UK bureau)