Bank of England 'to hold rates at record low'

THE Bank of England is expected to leave interest rates at a record low 0.50 per cent tomorrow, but experts are unclear about whether the central bank would extend its credit-easing plans.

The BoE's rate-setting Monetary Policy Committee (MPC) kicks off its crucial two-day gathering on overnight against the backdrop of Britain's worst recession since the early 1980s.
"The MPC will... go into its meeting this week with little assurance that either money or lending growth is showing the improvement necessary to turn the fragile signs of economic recovery into a strong and sustained upturn,'' said Capital Economics analyst Roger Bootle.
"We still expect the committee to announce a £25 billion ($50.1 billion) extension to quantitative easing (QE).''

Under QE, central banks purchase government bonds from commercial insitutions in the hope of kick-starting lending to businesses and individuals and hauling the country out of a deep downturn.

Up to now, the BoE has injected £125 billion in the QE initiative that is designed to crack the credit crunch and help lift the nation out of a sharp downturn.