Bank considered £100bn QE injection

 
City A.M. Reporter
Bank of England policymakers voted unanimously for this month's restart of quantitative easing, and considered injecting even more than the £75BN agreed, minutes to Bank's October meeting showed.

Bank's Monetary Policy Committee surprised markets earlier this month by moving more rapidly and forcefully than expected to launch a second round of quantitative easing to support Britain's ailing economy.

Minutes to the October meeting showed that Bank considered injecting between £50bn and £100bn into the economy.

"For some members, the substantial downside risks pointed to injecting a larger monetary stimulus than otherwise in order to place the UK economy in a stronger position were those risks to materialise," the minutes said. "Depending on developments in the euro area and financial markets, the size of t he stimulus could be adjusted in either direction."

Bank said that it did not expect the impact of this round of QE to be materially different to the 200 billion pounds of purchases conducted between March 2009 and February 2010.

The minutes cited a sharp deterioration in the international outlook as the key reason for not delaying the decision until the publication of new quarterly forecasts in November.

Economists polled by Reuters last week expected there to have been unanimous support for QE at October's meeting, an d also predicted unanimous vote to keep rates on hold at their record low 0.5 per cent.

In September all nine MPC members voted for steady rates, but Adam Posen was the only member to call for a new round of quantitative easing, as he had done since October last year.