BOE stumps up another £50 billion

The Bank of England yesterday took a few people by surprise by deciding to pump an additional £50 billion of fresh capital into the UK economy to widen their programme of quantitative easing.

This latest injection will take the BOE’s total spending to £175 billion, going over the £150 billion target set by the chancellor.

In a statement, the Bank of England explained their actions by stating that that the UK recession "appears to have been deeper than previously thought".

The BOE announced that they will also be keep interest rates unchanged at 0.5% for a consecutive fifth month.

A survey released on Wednesday showed that the UK’s services sector grew at its fastest pace in July for more than a year, strengthening predictions that the economy may have started to re-energise for the third quarter.

An equivalent survey on the manufacturing sector released earlier in the week showed an increase in July for the first time since last March. Together, the reports suggest Britain may now be emerging from recession after the second quarter’s unexpectedly sharp 0.8 percent fall.

The FTSE 100 regained earlier losses to close up 43.40 points at 4,690.53.

Meanwhile the FTSE 250 continues its steady upward climb, on Thursday by a further 111.47 points to close on 8,377.55

The pound had a minor collapse against the other major currencies on Thursday’s trading.

• Pound/US dollar 1.6775
• Pound/Euro 1.169
• Pound/Japanese Yen 161.1997
• Pound/Swiss Franc 1.8028

A survey released on Wednesday showed US companies cut a worse than expected 371,000 jobs last month. The ADP National Employment Report, showed its smallest decline since October, with economists expecting a decrease of 350,000.

However, the 371,000 lost posts shown in the ADP report are consistent with an increase of 0.3 percentage points in the unemployment rate

Yesterday on Wall Street, the Dow Jones continued its decline falling 30.3 points to 9250.67. The NASDAQ did little better, down 16.55 points to close on 1976.50

Trump Entertainment Resorts bondholders plan to reject Donald Trump’s attempt to take control of the bankrupt casino company saying it would leave their securities worthless, reports Bloomberg. The bondholders are owed $1.25bn. Trump, with the help of Beal Nevada Bank, is attempting to retake control of the company he founded after the three casinos it owns in Atlantic City, New Jersey, wound up in bankruptcy protection a third time.

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