EEF blog

In a surprise move today, the Bank of England announced that it would expand its quantitative easing programme to inject an extra £50bn into the economy on top of the £125bn that it has already spent.   This was a surprise, given that recent business surveys have pointed to the recession moderating with even the odd sign of growth. The Bank's statement commented on the recession 'being deeper previously thought'.  And that's the key issue. This week's data on bank lending and on the banks' half yearly results have illustrated the severity of this recession. It confirms our thinking that the recovery is likely to be halting and that it would be extremely dangerous to take away support for the economy too quickly.