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BoE Minutes: MPC voted 6-3 to maintain QE at £375B

FXstreet.com (Barcelona) - BoE Minutes from the MPC monetary policy meeting held on 8 and 9 May and released today reveal that the Committee voted unanimously in favor of maintaining the interest rate at 0.5%.

As far as the proposition to continue with the program of asset purchases totaling £375 billion is concerned, for the second straight month six MPC members voted in favor while three voted against. The Governor Mervyn King, Paul Fisher and David Miles who voted against preferred to boost the QE program by £25 billion to a total of £400 billion.

According to the minutes, the MPC “news on the month had on balance been favourable and it was likely that the level of output at the end of Q2 would be 0.7% higher than the Committee had expected three months ago.” They emphasized however that in historical terms the growth perspectives were still unfavorable and contemplated the possibility of inflation rising again slightly and remaining above the 2% target for the next two years.

The majority of the MPC members did not consider a further increase of the asset purchase program necessary after the February expansion. The Governor Mervyn King, Paul Fisher and David Miles argued however that and another expansion of QE “would facilitate an earlier normalisation of the monetary stance when that became appropriate.”

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