US Federal Reserve announces further quantitative easing

US policy-makers tonight announced further emergency measures to prop up the recovery of the world’s biggest economy.

The Federal Reserve said it would pump an extra $600bn (€425m) into its economy over the next eight months in a second round of quantitative easing.

The money, which is higher than the $500bn (€354.2bn) which had been expected, is intended to boost its economic recovery, which has slowed since the summer.

The US injected some $1.7 trillion (€1.2 trillion) into the economy through quantitative easing in the height of the recession, but the Fed believes a further move, which has been dubbed QE2, is now necessary.

The Bank of England’s Monetary Policy Committee will tomorrow announce whether it will take similar action in the UK.