LONDON — The Bank of England began a two-day monetary policy meeting here on Wednesday that was widely expected to result in more stimulus to boost Britain’s recession-hit economy. Britain’s BoE is set to keep its key interest rate at a record-low 0.50 percent — where it has stood for more than three years — and agree to pump out another 50 billion pounds (US$78 billion) in fresh cash, analysts said. The central bank’s Monetary Policy Committee has so far pumped the economy with 325 billion pounds under its Quantitative Easing (QE) stimulus policy since March 2009, when it also slashed its key rate to its all-time low level. “The odds strongly favor the Bank of England returning to Quantitative Easing at the conclusion of the Monetary Policy Committee’s July meeting on Thursday after halting the programme in May and June,” said Howard Archer, chief UK economist at the IHS Global Insight consultancy.
“Latest economic data and survey evidence have been weaker and disappointing overall, increasing the risk that the economy suffered further contraction in the second quarter.” Analysts added that the BoE would unveil more QE because British inflation was falling and owing to eurozone debt concerns despite last week’s EU summit deal aimed at further tackling the bloc’s crisis.