MPC split over effect of future stimulus

Ben Southwood
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BATTLE lines were drawn at the Bank of England’s last rate-setting meeting, the minutes released yesterday showed, with some members arguing a case for more quantitative easing (QE) and others believing that the steam was coming out of the asset purchase scheme.

Though the vote was unanimous on keeping rates and QE constant, with policymakers on the Monetary Policy Committee (MPC) agreeing there was “little to be gained” in changing policy before the current £50bn programme of purchases was completed, members were divided on future policy.

While all members agreed that more QE could bring long-term yields even further down, policymakers were divided over whether this would be positive for the economy overall.

Robert Wood, chief economist at Berenberg, said the minutes made the November policy decision “almost too tight to call,” but a vote for no change was “slightly more likely” than a decision in favour of beefing QE up.