Following the most recent Monetary Policy Committee meeting the Bank of England announced that it was throwing even more money at the economy in the form of quantitative easing, which has already cost £175 billion.

Originally the maximum amount put aside for the programme by the government was £150 billion, but with the latest extension that will see a further £25 billion ploughed into the economy through QE this amount has gone up to £200 billion.

The central bank also announced that it would be keeping the base interest rate on hold at 0.5 percent in the hope that this would ease the strain on household finances and on the economy.

The extra £25 billion that has bee put aside for quantitative easing is to be spent over the next three months, but the decision to further extend the programme has received mixed reactions, with some stating that the government is now throwing good money after bad because the QE programme is not working.

The governor of the Bank of England, Mervyn King, had to write to the Chancellor of the Exchequer, Alistair Darling, to get the extra funding approved.

In his letter he wrote: “Households have reduced their spending substantially and business investment has fallen especially sharply. A number of indicators of spending and confidence, however, suggest that a pickup in economic activity may soon be evident.”

Many think that this will be the end of the road for the QE programme, and one economist stated: “We suspect this will mark the last stimulus effort from the Bank of England, with the next move being to rate hikes, possibly starting in August after the Bank has assessed the impact from any potential fiscal policy changes in the wake of next year’s election.”

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