Quantitative easing plans 'could have various outcomes'

A number of outcomes are possible for the economy following the Bank of England's decision to reduce the interest rate and stimulate quantitative easing, according to international money transfer service HiFX.

The bank announced an asset purchase programme of £75 billion to allow for quantitative easing as it cut the interest rate.

According to the international money transfer provider, this plan could have three effects; the first being that it does not work in stimulating the economy, that it works temporarily, or that it kick-starts the economy back into a cycle of growth.

"Looking at Japan, which is the best example of whether quantitative easing works, the outcome may prove the temporary one especially given the global slowdown - but temporary is still better than nothing at all," commented Chris Towner, the company's senior currency strategist.

Mr Towner added that the fortunes for the pound will be affected by what happens to the US dollar rather than base rate movement.