The Bank of England has announced a further round of quantitative easing in a bid to stimulate the flailing UK economy. The Bank have vowed to keep interest rates at their current record low and have announced plans to boost public spending through the purchase of £50bn gilts.
The bank’s response suggests that the UK economy is not expected to recover in the near term. Growth has been stifled by recent uncertainty over the Greek bailout and the Euro debt crisis.
UK pension funds have expressed concerns over the level of quantitative easing employed by the Bank of England and the corresponding effect it will have on annuities which are likely to fall in line with bond prices.