The Bank of England’s monetary policy committee (MPC) believes inflation may not fall to its 2 per cent target as early as it had expected, as minutes of its latest meeting showed it is poised to step up its economic stimulus efforts.
According to minutes of the MPC’s September rate-setting meeting released today, members voted unanimously to keep interest rates at the record low of 0.5 per cent and maintain its quantitative easing programme at £375 billion.
However, one unidentified member of the nine-strong committee believed there was a case for announcing more asset purchases immediately.
For the rest of the MPC, it was a “relatively straightforward” decision to keep to the current bond-buying programme, which will run until November.
The minutes added: “Some of these members felt that additional stimulus was more likely than not to be needed in due course, while others saw the risks to inflation in the medium term as being more balanced around the target.”
Figures released on Tuesday showed inflation as measured by the consumer prices index fell to 2.5 per cent in August, from 2.6 per cent the previous month, and the rate is expected to slow to 2 per cent by the middle of next year.
But today’s minutes show the MPC believes higher oil prices and the threat of increased food and utility bills to come means that inflation is unlikely to slow as rapidly as they had previously forecast.
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Sunday 19 May 2013
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