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Categories:Mortgages

All nine back rate hold but Posen is sole voice again for £50bn QE2

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All nine members of the Bank of England’s monetary policy committee voted to keep bank rate on hold at 0.5 per cent in September, according to the latest MPC minutes.

This is the second month all nine members have voted to keep interest rates on hold, which has been at the record low level since March 2009

In July, two MPC members, Spencer Dale and Martin Weale, voted in favour of a 0.25 per cent base rate rise.

MPC member Adam Posen once again called for a further £50bn of quantitative easing in September.

Capital Economics UK economist Samuel Tombs says: “The minutes of September’s MPC meeting strongly suggest that QE2 is set to be launched in the very near future. Admittedly, no other members joined Posen in voting for an instant resumption of the asset purchases. However, most members of the committee accept that the case for immediate policy stimulus has significantly strengthened over the last month. The debate is now how to provide that extra stimulus.”

Tombs predicts that a further £50bn of gilt purchases will be announced in November.

Chadney Bulgin mortgage partner Jonathan Clark says: “There were no surprises in this meeting. I think it is good news that Posen is thinking about quantitative easing because it will put some pressure on the bank to make that happen.”

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