The Bank of England’s Monetary Policy Committee remains split over increasing its programme of quantitative easing, with the same three members voting to increase it by £25bn.
The minutes from May’s MPC meeting show BoE governor Mervyn King, Paul Fisher and David Miles voted to increase QE by £375bn to £400bn earlier this month, the same three who voted for an increase at April’s meeting. The other six MPC members voted to keep QE at its current level.
All members voted to keep base rate at a record-low 0.5 per cent, the level at which it has been since March 2009. The BoE started its programme of QE on the same day and the last time it was increased was on 5 July, when the MPC voted to increase it by £50bn to £375bn.
Those arguing to keep QE at its current level argued that with better-than-expected growth in the first quarter, the extension of the Funding for Lending scheme and the effects of the last round of QE still being seen, an extension was not necessary at this time.
Those arguing to boost the size of the programme decided that more QE was necessary to address the slack in the labour market and to increase supply and demand.