The Bank of England has held interest rates at 0.5% for the eight month in a row and inject an extra £25bn into the economy in an attempt to stimulate recovery.

The Bank noted that UK output has fallen by 6% since the start of the year and said: “Households have reduced their spending substantially and business investment has fallen especially sharply.”

However there are signs of recovery. The Bank has so far spent £175bn in its “quantitative easing” programme, using newly created money to kick-start the economy and the latest investment will bring the total to £200bn.

The Bank said: “A number of indicators of spending and confidence suggest that a pick-up in economic activity will soon be evident.”

Topics