What is Quantitative Easing?

Using money that has been electronically created, the Monetary Policy Committee purchases assets (usually government debt) from the private sector in order to inject money directly into the economy. This increases the demand, and therefore the price of government bonds and so encourages investors to instead purchase other assets such as corporate bonds and shares. This then encourages the issuance of new bonds to stimulate spending thus increasing aggregate demand within the economy. 

Since the policy was introduced in the UK in 2009, £375bn has been injected into the economy through quantitative easing.