The Bank's Monetary Policy Committee will announce its monthly policy today. Economists are widely expecting that it will announce billions of pounds of quantitative easing (QE).
The Bank's scheme of QE, which involves buying up assets from banks to increase their cash flow, began in March 2009. So far, around £275 billion has been injected into the UK economy this way and a further £50 billion of QE is expected, with interest rates expected to be kept at 0.5%.
The UK economy actually shrank by 0.2% in the final quarter of last year and the MPC are likely to use this as a reason for further QE. There has been some improvement in the economy in January this year, however, in the manufacturing, services and construction sectors. More QE is on the cards despite this.
Not everyone is for QE, and it could spell bad news for people who are going to retire this year. Dr Ros Altmann, Director-General of Saga, said: "Over a million pensioners will be permanently poorer for the rest of their lives, as they have bought an annuity at rates that have been artificially depressed by the Bank of England".
Pensions are a hot topic at the moment. According to Joanne Segars, chief executive of the National Association of Pension Funds (NAPF), QE makes it more expensive for employers to provide pensions. Meanwhile, it's less likely that the state will be able to support people into old age, because people are living longer and the Government has less money. To help combat this, the Government has raised the retirement age of men and women and will introduce automatic pension enrolment this year, so that workers automatically pay into a pension savings scheme unless they opt out.
However, an expert at think banking said this could actually cause problems for some people. "Automatic enrolment onto a pension scheme means less money reaching people's bank accounts each month, which could cause problems for people who are struggling financially. It's an opt-out scheme, but this should be made clear from the start so that it won't affect people with existing money worries.
"This also highlights the need for careful budgeting, now and in the future. Costs of living are still increasing and a well-planned budget can help to minimise the impact of this. For those who struggle to plan their finances, an account with a built-in budgeting service could help."
There are other fears about QE that the UK economy could go the same way as other nations that have 'printed money' and we could see hyper-inflation.
The Bank of England is responsible for keeping the economy stable, and hopes QE will increase lending to businesses and stimulate growth.