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MPC split over QE increase

The Bank of England’s monetary policy committee were split 7-2 over whether to increase the size of its quantitative easing programme earlier this month.

The minutes from March’s meeting show that of the nine members which make up the committee, David Miles and Adam Posen voted to increase the size of the programme by £25bn to £350bn,.

In February, the committee voted to increase QE by £50bn to £325bn.

All nine members voted to keep base rate at 0.5 per cent. Base rate has now been at a record-low 0.5 per cent since March 2009, or 36 consecutive months.

The minutes reveal Miles and Posen voted to increase the size of QE over fears of weak growth.

The minutes say: “Two members continued to think that a larger monetary stimulus was warranted to reduce the risk that persistently weak growth would damage the future supply capacity of the economy.

“In their view, policy should be loosened further to stimulate demand quickly, but the stimulus could then be withdrawn were it to become clear that there was a significant risk of inflation rising above target in the medium term.”

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