King’s final meeting ends with a whimper as Bank votes to hold

Julian Harris
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OUTGOING Bank of England governor Sir Mervyn King completed his final rate-setting meeting yesterday, as the monetary policy committee (MPC) decided to hold its current stance.

In recent months King has voted for the Bank to expand its asset-purchasing programme – known as quantitative easing (QE) – by an extra £25bn to a total of £400bn, yet has been outvoted by colleagues.

On 19 June the minutes of this month’s meeting will reveal if King again voted for further stimulus, or if he changed his mind on the back of more bullish economic data emerging in recent weeks.

MPC members Paul Fisher and David Miles have also been keen on delivering more stimulus.

Following yesterday’s decision, the Bank’s main interest rate will stay at 0.5 per cent while the size of the total QE programme will remain at £375bn.

King, who has been governor of the Bank since July 2003, will step down at the end of this month to be replaced by Canadian Mark Carney.

Some economists expect Carney to introduce a pledge over how long rates will be held down.