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Fed bond buying twice as effective on growth as BoE's - research

* BoE looks at effect of buying bonds worth 1 pct of GDP

* Fed purchases found to have twice impact on GDP of BoE's

* Similar inflation impact from both programmes

LONDON, April 17 (Reuters) - Bond purchases by the U.S. Federal Reserve have been twice as effective at boosting economic output as those by the Bank of England, research by a BoE policymaker showed on Thursday.

The findings are likely to be of interest to the European Central Bank, which is weighing whether to start an asset purchase programme in the euro zone to ward off the threat of deflation.

Martin Weale, who sits on the BoE's rate-setting committee, looked at growth and inflation data from March 2009 to May 2013 to assess the impact of bond purchases by the BoE and the Fed.

Fed purchases of bonds equivalent to 1 percent of gross domestic product raised U.S. GDP by 0.36 percent, while BoE purchases on the same scale raised gross domestic product by only 0.18 percent, Weale said.

The effect on inflation was similar in both countries - pushing up the consumer price index by 0.38 percent in the United States and 0.3 percent in Britain.

"These findings are encouraging, because they suggest that asset purchases can be effective in stabilising output and prices," Weale said in the paper, which was co-written with BoE official Tomasz Wieladek.

The BoE bought 375 billion pounds ($630 billion) of bonds between March 2009 and October 2012, while the Fed has so far carried out more than $3 trillion of purchases since 2008.

The findings also suggest BoE asset purchases were slightly more effective than estimated in a BoE paper in 2011. This calculated a 1.5-2.0 percent boost to output and a 0.75-1.5 percent rise in inflation from the BoE's first 200 billion pounds of bond purchases, which at the time was equivalent to 14 percent of GDP.

The paper did not directly address why the BoE needed to buy more bonds, relative to the size of its economy, to have the same impact on GDP as the Fed.

The paper took account of different national fiscal policies and weakness in the euro zone - both common explanations for why British growth has been much weaker than the United States' since the financial crisis.

Weale said the main way that the Fed's purchases had boosted GDP was to encourage investors to put money into riskier assets - which was also what the BoE hoped for from QE in Britain.

But Weale's research suggested that the BoE asset purchases' main effect was to convince markets that interest rates would stay at a record-low 0.5 percent for a long time.

* To read the BoE paper 'What are the macroeconomic effects of asset purchases?', see http://www.bankofengland.co.uk/research/Documents/externalmpcpapers/extmpcpaper0 0 4 2 . p d f ($1 = 0.5955 British Pounds)

(Reporting by David Milliken; editing by William Schomberg/Ruth Pitchford)