Bank of England ups QE by £75bn

The Bank of England has raised its quantitative easing fund by £75bn.

A total of £200bn had originally been earmarked for the scheme, which aims to breathe new life into the economy.

The decision to expand its asset purchase programme to a total of £275bn highlights the precarious state of Britain's economy as global growth slows, government spending cuts and tax hikes bite and consumers face high inflation and slow wage rises.

The bank kept interest rates on hold at a record low of 0.5 per cent.

Analysts in a Reuters poll had reckoned there was a 40 per cent chance the central bank would restart its asset purchase programme, or quantitative easing, this month.

A number of policymakers had flagged their readiness to join arch-dove Adam Posen and vote for more quantitative easing after many had already seen the case for more easing strengthening at the September meeting.

Britain's economy has basically flatlined over the past 12 months. With the government's hands tied by its pledge to erase a budget deficit of some 10 percent, pressure has been mounting on the bank over the last couple of months to do more to support the economy.

All eyes will now be on the European Central Bank later this session to see if it primes markets for pre-Christmas interest rate cuts.