Rates go lower as cash pumped in
Updated on 05 March 2009
The Bank of England embarks on an economic policy that has never been tried in Britain: quantitative easing.
The term is obscure, but the implications are massive.
The bank will flood the banking system with cash, pumping in £75bn, but that sum could be doubled if the economy fails to respond.
At the same time the bank also chopped interest rates by half a per cent to just 0.5 per cent, an all-time low.
Mervyn King
Faisal Islam met Mervyn King, governor of the Bank of England. He began by asking him where the £75bn he was going to inject into the economy was coming from.
Quantitative easing discussion
Jon Snow talks to Sir Howard Davies, director of the London School of Economics and former head of the Financial Services Authority and Will Hutton chief executive of The Work Foundation, an independent consultancy agency.
