Rodger Broad, director of Institute of Directors (IoD) South

by business editor Trevor Sturgess

tsturgess@thekmgroup.co.uk

Business chiefs are calling on the Bank of England to inject a further £50 billion into the economy to avert a double dip recession.

The Institute of Directors, with members across Kent and Medway, wants the bank to increase quantitative easing (QE).

The Bank has already injected £200bn in QE – effectively printing money – but stopped some months ago.

The IoD believes the Bank's Monetary Policy Committee (MPC) should extend QE because money supply growth is weak.

Hopes of a sustained economic recovery rest on an increase in the so-called velocity of money – the number of times money changes hands.

The IoD argues that the velocity is just as likely to decline as rise over the coming months and says it's too risky to pin hopes of continued recovery on this unpredictable activity.

It also believes the effect of the euro-zone crisis is damaging business confidence and putting investments on hold. Given the weakness of the recovery to date, business and consumer confidence could be the tipping point between recession and recovery.

Rodger Broad, director of IoD South, said: "With interest rates at historic lows, the MPC has very little room for manoeuvre. There is a pressing need to boost business confidence and also avoid the risk of a double dip recession which would further undermine the UK's ability to retain its credit rating."

Graeme Leach, IoD chief economist, added: "The time to launch a second round of QE has arrived. The risks facing the UK economy are sufficiently strong enough to warrant a further extension of QE and reduce the danger of a double dip recession."