MPC minutes show unanimous vote to keep QE on hold

Bank of England policymakers, under the leadership of new governor Mark Carney, voted unanimously to keep interest rates and money-printing on hold this month.

Minutes of the monetary policy committee (MPC), published today, showed that the two-day meeting, which concluded on 4 July, was the first since October that all nine members had voted to keep the level of quantitative easing (QE) steady at £375 billion.

Previous governor Sir Mervyn King, along with Paul Fisher and David Miles, had been voting for a £25bn extension to the bond-buying programme since February, but all members were opposed to change this month.

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The minutes said: “For most members, the current policy setting was appropriate and the onus on policy at this juncture was to reinforce the recovery by ensuring that stimulus was not withdrawn prematurely, subject to keeping inflation on track to hit the 2 per cent target in the medium term.”

Official figures released yesterday showed that the consumer prices index hit a 14-month high of 2.9 per cent in June, up from May’s reading of 2.7 per cent, although Carney avoided having to write a formal letter to the Chancellor in his first month in the post because the figure was below 3 per cent.

Howard Archer, chief UK economist at IHS Global Insight, said: “The indication from the minutes is that some MPC members do still believe that further stimulus is warranted, but July was not the month to act given that the Bank of England is due to decide in August whether it will adopt a policy of further guidance.”

He added: “We are now increasingly leaning towards the view that more QE will only occur should the economy suffer a marked relapse over the coming months.”