The US Federal Reserve Board and Bank of England have embarked on a policy of expanding the money supply by buying securities from banks, known as quantitative easing.
However, it also extended the program (which will expire at the end of May) for an additional three months.
Analysts suggested that the Bank may soon move past the total of £150 billion, initially authorized by the Treasury.
A survey published by the Confederation of British Industry in fact supported views that the gloom among manufacturers was bottoming out. 17% of 575 firms surveyed expected their output to increase in the next three months, while 34% expected a decrease.
Alistair Darling, Britain’s Treasury Chief, has xpected the flow of credit from banks to increase. The government has extracted agreements from nationalized mortgage lender Northern Rock and part-nationalized Royal Bank of Scotland and Lloyds Banking Group to make more credit available,” he added.
However, he forecast that GDP will fall by 3.5% for the full year, while the IMF has predicted a 4.1% drop.
