A number of economists have predicted that the governments plan to try quantitative easing in order to boost the economy will prove successful.

The plan involves ploughing between £75 billion and £150 billion back into the economy through the purchase of assets such as government and corporate bonds, and this is something that the government has decided to focus on in place of continued cuts in interest rates, which have already fallen to all time lows of just 0.5 percent.

A poll of economist showed that many thought that the quantitative easing programme would help to bring the country out of recession, even though it could be a slow process. Economists have also predicted that the government can no longer look at reducing interest rates further in order to ease pressure, because the base rate is already at such a low level, and quantitative easing will provide an effective alternative solution to trying the get the economy back on its feet.

Nearly all of the forty nine economists that were polled about the potential success of quantitative easing said that they thought it would prove to be successful.

One economist said: “Ultimately, we feel that QE will be effective. That is because we believe that the BoE will conduct QE, issuing more central bank money, until it becomes effective.”

Most also agreed that the Bank of England could not reduce interest rates any further in order to tackle the economic problems, with the majority predicting that the base rate would now remain static for the rest of this year and into the next year.

One economist stated: “Official rates are about as low as they can go. No further monetary policy action looks to be on the cards for a while longer.”

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