More QE could be needed

The Bank of England monetary policy committee voted unanimously to keep its programme of quantitative easing at £275bn in January but some members felt it
The minutes of January’s meeting show all nine members voted to keep bank rate at 0.5 per cent for the 34th consecutive month.

The committee believes inflation will continue to fall sharply in the coming months from its current level of 4.2 per cent, towards its target of 2 per cent.

Some members believe QE will have to be increased in the coming months. The current programme will be completed by early February.

The minutes say: “The balance of risks to inflation in the medium term had changed little since November. For some members, the risks of undershooting the target meant that a further expansion of asset purchases was likely to be required.”

Capital Economics chief UK economist Vicky Redwood says: “We expect more QE to be announced next month.”