LONDON, Feb 4, 2010 (AFP) - The Bank of England will likely decide to pause its credit-easing programme at a policy meeting later Thursday after Britain emerged from recession late last year, economists said.
The BoE will make a statement after its two-day meeting at 1200 GMT with all eyes on its quantitative easing (QE) policy, whereby the central bank creates money by purchasing bonds from commercial institutions.
Market expectations are for no change to its key interest rate, which has stood at a record-low 0.50 percent since March 2009.
The bank has so far injected 200 billion pounds (222 billion euros, 320 billion dollars) into the economy under QE.
The radical policy was also launched in March 2009 in a bid to get banks lending again and help drag Britain out of a deep recession.
However, recent official data showed that the British economy only narrowly emerged from recession in the fourth quarter of 2009 with 0.1-percent growth.
"The BoE arguably faces one of its most daunting policy decisions in recent history today when it must decide whether or not to expand quantitative easing and add to the 200 billion (pounds) of asset purchases," Lloyds Banking Group economist Trevor Williams said.
He said that the market was "overwhelmingly leaning towards a QE pause" and no change in the banks's key lending rate.
Later Thursday, at 1245 GMT, the European Central Bank will also announce its latest monetary policy meeting.
ECB policymakers must grapple with mounting eurozone financial tensions in the face of Greece's massive public deficit and debt problems.
Most analysts expect that the ECB's main interest rate will stay unchanged at a record low of one percent as it seeks to help the European economy back to health.
