Bank of England expected to reduce rate to nearly zero

City economists predicted that the Bank of England's Monetary Policy Committee will reduce the interest rate to 0.5%. While the half-point cut would bring the rate to a historic low, the focus is expected to be on plans for quantitative easing, which would involve injecting more money into the economy. "Credit starvation is the biggest problem facing the U.K. economy, and increasing the supply of money should help to loosen these restrictions and boost the supply of money and credit," said Hetal Mehta, an Ernst & Young Item Club economist.

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