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

FXstreet.com (Barcelona) - BoE Minutes from the MPC monetary policy meeting held on 6 and 7 March 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, 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 “continued to judge that, as long as domestic cost and price pressures remained consistent with inflation returning to the target in the medium term, it was appropriate to look through the temporary, albeit protracted, period of above-target inflation resulting from higher administered and regulated prices.”

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 “further asset purchases, by lowering longer-term interest rates and supporting a range of asset prices, could facilitate a smoother path towards the economy’s new equilibrium, help prevent a more persistent reduction in spending, and thereby avoid potentially lasting destruction of productive capacity and increases in unemployment.”

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