The Committee was unanimous in deciding on the additional QE, which is slightly higher than market expectations and takes the total stock of government bond purchases to £875bn.
The Bank also held the base rate, despite some market commentators expecting the announcement of negative interest rates.
Laith Khalaf, financial analyst, at investment platform AJ Bell, said: “This may not be the end of the Bank’s pandemic interventions, particularly if another lockdown becomes necessary further down the line.
“The Bank is beginning to run out of dry powder as it now holds almost half the gilt market. and interest rates are already close to zero. That means if the central bank wants to boost the economy further, it may resort to even more extraordinary measures than we have today.
“Negative interest rates are certainly on the table. The Bank is seriously weighing this up and has written to bank chiefs to see if they can handle it. QE could also shift towards different assets, such as more corporate bonds, high yield bonds and even equities, as has happened in Japan.
“Much will depend on how the pandemic, social restrictions and the government’s fiscal response proceed from here. For the moment markets are pricing in a 40% chance of an interest rate cut next year, and it’s fair to say that markets have consistently underestimated the capacity for monetary policy to loosen ever since the financial crisis.
“The Bank of England is now forecasting an 11% drop in GDP in the last three months of this year. It then projects growth through next year, reaching pre-COVID levels by the end of the year, on the premise that social restrictions loosen and the pandemic’s impact on the economy begins to wane. Let’s hope they’re right, even though that looks like a heroic assumption right now.”
Derrick Dunne, chief executive of DFM Beaufort Investment, said the latest QE measures show just how concerned the Bank is about the state of the economy.
He said: “Desperate times might call for desperate measures, but the Bank doesn’t think we’re ready for negative rates quite yet. What we have instead is a further £150billion of quantitative easing – £50billion more than expected – and this is still a bold move, showing the extent of its concern for the economy as we enter this second lockdown.
“It’s likely GDP is going to take another hit, but investors should take comfort in the fact the Bank isn’t shying away from stronger measures in Q1 if needed. The Chancellor’s statement today might also provide fresh hope if he further extends help for struggling businesses and their workers.
“All the same, markets don’t like uncertainty and so we have a rocky road ahead. More than ever, it’s essential to be keeping your own objectives in mind and avoid getting distracted from your long-term goals.”