UK Drops Rates to 0.5%, Begins 'Printing Money'

Quantitative easing begins with $108B of new money
By Jason Farago,  Newser Staff
Posted Mar 5, 2009 6:18 AM CST
Alistair Darling, the British chancellor, gave permission to the Bank of England to 'print' money in a letter today to the Bank of England.   (AP Photo/Lefteris Pitarakis)
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(Newser) – The Bank of England cut interest rates today by 50 basis points to an all-time low of 0.5% and began a far more drastic process: quantitative easing, or "printing money." The Times of London reports that the Bank received permission from the government this morning to spend $106 billion of newly created money buying up government and corporate debt. The UK's central bank recently revised down already glum growth forecasts, and many economists expect no growth this year.