MPC members unanimous on QE

by Aaron Strutt

Oct 20 2011

The minutes from October's Bank of England Monetary Policy Committee meeting show that all nine members voted for an additional £75bn of quantitative easing. The members also voted to keep base rate on hold at 0.5%.

The minutes say: “There was considerable uncertainty over the scale of asset purchases necessary to keep inflation at target in the medium term. Depending on developments in the euro area and financial markets, the size of the stimulus could be adjusted in either direction.

“For some members, the substantial downside risks pointed to injecting a larger monetary stimulus than otherwise in order to place the UK economy in a stronger position were those risks to materialise.”

Jonathan Loynes, chief european economist at Capital Economics, said: “In the end, though, the bleak run of news on both the domestic and global economies clearly persuaded all members of the need to act without delay.

“Admittedly, the committee had not seen yesterday's higher than expected CPI figures at the meeting. But we doubt that they would have had an influence on the decision, given that inflation is very close to a peak and should soon start to fall sharply.”

Source: Mortgage Strategy

20 October 2011