-BOE MPC Voted 5-4 at Jun meeting for unchanged QE
-BOE MPC King, Miles, Posen voted for stg50bn extra QE in Jun
-BOE MPC Fisher voted for stg25bn extra QE in Jun
-BOE MPC Voted 9-0 to keep Bank Rate at 0.5%
-BOE MPC Lookd at merits of cutting Bank Rate
-BOE MPC Judged bank rate cut had no advantages over more QE
LONDON (MNI) – The Bank of England Monetary Policy Committee came
very close to relaunching quantitative easing in June, with the minutes
showing a five-to-four split in favour of unchanged policy with
Governor Mervyn King in the minority voting for fresh QE.
The minutes of the June meeting revealed King, David Miles and Adam
Posen all voted for an extra Stg50 billion in QE, with Executive
Director Markets Paul Fisher voting for a further Stg25 billion. There
was discussion over cutting Bank Rate from 0.5%, but the MPC voted nine
to zero against it, arguing that at present it had no advantages over
more QE.
The majority on the MPC took the view that it was better to wait
and see how euro area events unfolded before backing more stimulus,
although extra stimulus was likely to become necessary.
“While acknowledging that further stimulus was likely to become
warranted at some point, most members noted that there were several key
events occurring over the coming weeks that could have a material
bearing on the situation in the euro area and that there was merit in
waiting to see how matters evolved before the MPC reached a conclusion
on whether to add any further monetary stimulus,” the minutes said.
The MPC noted that the euro area crisis was feeding through to
higher bank funding costs in the UK. This was creating a “significant
current impediment” to the country’s economic recovery.
Mortgage and other interest rates spread had risen because of
this, but King told the MPC the BOE was already working on new bank
funding plans with the Treasury, and these were unveiled in last week’s
Mansion House speech.
-London newsroom: Tel: +44 207 862 7491; e-mail:
drobinsons@marketnews.com
[TOPICS: M$$BE$,MT$$$$]