MPC remained split over call to raise QE

Outgoing Bank of England governor Sir Mervyn King was outvoted again in his call for more monetary stimulus this month, it was revealed today.

Minutes of the Bank’s monetary policy committee (MPC) meeting, held on 8 and 9 May, show that King – along with fellow policymakers Paul Fisher and David Miles – wanted to raise the level of quantitative easing by £25 billion.

However, they were outvoted by the MPC’s six other members, who wanted to keep the stock of asset purchases at £375bn. Members voted unanimously to keep the base rate at its record low of 0.5 per cent.

King will be replaced as governor by Canadian central banker Mark Carney at the start of July.

Howard Archer, chief UK economist at IHS Global Insight, said: “While the May minutes indicate little change to the MPC’s overall stance, we believe the Bank of England will sooner or later undertake more stimulative action to help the economy.

“Assuming that the MPC does go for another £25bn of QE in July or August, we assume that this will be followed by a final £25bn of QE, taking the stock up to £425bn, later in the year.”