* 53 of 61 economists see no more BoE rate cuts this year
* Bank Rate seen on hold at 0.5 percent through late 2010
* 37 of 51 economists say planned 150 bln stg QE programme is about right, 10 say not enough, 4 too much
* 40 of 49 economists say bank is right to target medium- and long-term gilts
By Jonathan Cable
LONDON, March 5 (Reuters) - The Bank of England has finished hacking away at interest rates and its plans to inject up to 150 billion pounds into the economy by buying bonds will eventually be enough to kick-start it, a Reuters poll found.
The survey, taken after the central bank cut a further 50 basis points from rates to a 315-year record low of 0.5 percent, found 53 of 61 analysts said they will remain on hold there this year.
With the BoE now essentially out of room on interest rates the focus has now turned to the start of quantitative easing measures -- or buying assets out of the open market to add to the money supply.
A significant majority, 37 of 51 economists said the up to 150 billion pounds worth of assets the government has authorised the BoE to buy planned was about right. Only 10 said that would not be sufficient while just 4 said it was too much.
"It's a good first start, it's more than I was expecting. But it's just a starting point, if it gets to 148 billion, they'll just up it," said Michael Saunders at Citi.
The central bank announced on Thursday it would buy 75 billion pounds of assets in the next three months, focused on medium- and long-dated government bonds, or gilts.
Gilts soared after the announcement, which highlights the depth of downturn caused by the global credit crisis, with the June gilt future rallying more than 350 ticks on the day, while an already weakened sterling fell against the dollar.
Indeed in the poll, the majority, 40 of 49, said the bank was right to target medium- and long-term gilts.
END OF THE RUN FOR RATES
The Bank of England has now slashed a massive 450 basis points from rates since October and at the lowest in the bank's 315-year history they are unlikely to go any lower.
Median forecasts of over 60 economists saw the Monetary Policy Committee holding rates at the historic low of 0.5 percent until the end of the third quarter 2010 at the earliest as the economy continues to struggle in the throes of a deep recession.
"We believe that the Bank rate has bottomed at 0.5 percent," said Philip Shaw at Investec.
In a poll taken last week median forecasts saw rates at 0.5 percent until the middle of next year.
BoE Governor Mervyn King said in an interview with Sky News after the poll was conducted that UK rates are unlikely to fall any further.
The British economy shrank 1.5 percent in the last quarter of 2008, the deepest quarterly contraction since 1980, and marking the first official recession in the UK since the 1990s.
The economy is predicted to contract 2.9 percent this year with a return to growth not expected until early 2010 at the earliest. [ECILT/GB]
The European Central Bank cut rates by 50 basis points
earlier on Thursday, putting them at 1.5 percent, but many
economists say they will fall further, to 1.0 percent. [ECB/INT]
(For poll data click on
(For a FACTBOX on changing forecasts see [ID:nL5938685]) (Polling by Bangalore Polling Unit)