Bank of England prints another £25bn

The Bank of England today announced an extra £25bn of quantitative easing – although it stopped short of adding £50bn as some analysts had expected.

The Pound gave a mixed reaction, gaining strength initially, before falling back as markets took the news in. ECB President Trichet also said this afternoon that Eurozone inflation would turn positive soon, signalling that European interest rates may start to go up before those in the UK. This would be likely to make the Euro more expensive.

As the dust settles on these announcements, sterling is back where it started the day against most currencies, although US Dollar exchange rates are slightly better than they were this morning.