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BoE ready to pump more money into economy if needed

FRESH money will be pumped into the economy if the outlook deterioriates further, the minutes from the Bank of England&rsquo;s May policy meeting indicated yesterday.<br /><br />At the meeting, all nine members of the Monetary Policy Committee (MPC) voted in favour of extending the central bank&rsquo;s quantitative easing programme by &pound;50bn, taking the total to &pound;125bn. However, the minutes show that some members argued for a larger stimulus of &pound;75bn.<br /><br />&ldquo;As the precise amount that would ultimately be required was so uncertain, there was no pressing need for the larger extension at this meeting,&rdquo; the minutes said.<br /><br />City economists yesterday took the Committee&rsquo;s conclusion that &ldquo;the risks of stimulating demand too little at the current time seemed greater than the risks of stimulating it too much,&rdquo; as a sign of further stimulus to come.<br /><br />&ldquo;The tone of the minutes suggests that the Committee is considering the need for further purchases above and beyond May&rsquo;s additional &pound;25bn,&rdquo; said Investec economist Philip Shaw.<br /><br />Business leaders yesterday pressed for additions to the programme as well.<br /><br />&ldquo;We urge the MPC to vigorously persevere with its asset purchase programme, and to consider accelerating and even increasing the scale of quantitative easing,&rdquo; said David Kern, chief economist at the British Chambers of Commerce.<br /><br />The Committee also voted unanimously to keep interest rates at a record low of 0.5 per cent.