The Bank of England (BoE) have today announced that they are injecting another £50 billion into the UK economy through further Quantitative Easing (QE) in an effort to stave off recession in a widely anticipated move. This means that once this latest round of QE is completed the BoE will have injected a total amount of £325 billion since it began in 2009. At the same time the BoE kept interest rates on hold at 0.5% a record low. While QE is usually seen as negative for the countries currency on this occassion there was a momentary spike as it seems the amount of QE had been over estimated, though as we approach the close of business for today Sterling exchange rates are ending on a negative trend. The outlook is gloomy for the UK and the fact they have had to inject more funds into the economy does not help, in fact it could signal that over the coming weeks and maybe even months we could see Sterling weaken against the majority of currencies.
In the past analysts have stated that QE does help boost growth but its impact is not instantaneous so this move may have come too late to stave off recession which is being so heavily predicted. Should the UK enter recession then we could see Sterling weaken considerably even with the issues in Greece.