Bank of England on verge of printing more money

The Bank of England is now “odds-on” to pump more cash into the economy next month after minutes published today showed its rate-setters came close to pushing the button earlier this month.

Governor Sir Mervyn King was among four members of the Bank’s monetary policy committee (MPC) to call for an extension of the UK’s quantitative easing (QE) scheme but they were outvoted by the five other members.

The minutes of the meeting, which took place a fortnight ago, reinforce expectations in the City that the Bank will sanction a further £50 billion of asset purchases on 5 July, taking the QE programme to £375bn.

Howard Archer, chief UK and European economist at IHS Global Insight, said: “The minutes of the June MPC meeting suggest that it is now odds-on that the Bank of England will announce more QE in July.

“Latest economic data and survey evidence have been weaker and disappointing overall, increasing the risk that the economy suffered further contraction in the second quarter. In addition, although the Greek election result reduced the likelihood of an imminent Greek exit from the eurozone, tensions and problems in the single currency area remain elevated with Spain a central focus.

“We suspect that latest developments are likely to prod at least one more MPC member into favouring more QE in July, and expect a £50bn portion to be announced.”