Bank of England Injects More QE Into U.K. Economy (Update 1)

Updated from 7:15 a.m. EST

LONDON -- The Bank of England is injecting another 50 billion pounds ($79 billion) into the British economy, which contracted in the last three months of 2011.

The new stimulus raises the total monetary stimulus since the program started in March 2009 to 325 billion pounds.

The hope is that by increasing the amount of money in the financial system, the purchases, known as quantitative easing or QE, will loosen credit for businesses and raise asset prices. Quantitative easing can be inflationary, but analysts say the bank has room to act.

The bank also Thursday kept its main interest rate unchanged at the record low of 0.5%.

The European Central Bank also left its benchmark interest rate unchanged at a record low 1.0%.

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