The Bank of England (BoE) kept interest rates on hold at 0.5% at its latest meeting and also announced that it will inject an extra £50bn into the UK economy.

The process involves the bank effectively printing money to buy Government and corporate bonds. It is on track to spend £75bn by June, and with the bank’s extra input this will be extended to £125bn.

The bank acknowledged that “the world economy remains in deep recession”, but added that, “surveys at home and abroad show promising signs that the pace of decline has begun to moderate”.

The BoE’s decision on interest rates came shortly before the European Central Bank (ECB) decided to cut its own interest rate from 1.25% to 1%.

Some City economists said it may be a hopeful sign that the bank’s programme of quantitative easing has only been extended to £125bn, given that the Treasury has said the bank can spend up to £150bn. The aim of quantitative easing is to boost bank lending by making more and cheaper funds available.

In April, figures released showed that the UK economy shrank by -1.9% in Q1 2009, the biggest three-month decline in gross domestic product (GDP) since the third quarter of 1979.

In addition, the latest unemployment figures showed the number of people out of work in the UK rose by another 177,000 to 2.1 million between December and February.