BoE Minutes: MPC voted 6-3 to keep QE unchanged

FXstreet.com (Barcelona) - BoE Minutes from the MPC monetary policy meeting held on 5 and 6 June 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. Governor Mervyn King, David Miles and Paul Fisher who voted against preferred to boost the QE program by £25 billion to a total of £400 billion.

According to the minutes, the MPC agreed that “although there had been little news on UK real activity on the month, the developments had generally been positive and followed a sequence of small improvements in earlier months.”

The majority of the MPC members did not consider a further increase of the asset purchase program necessary as they could already see a more established recovery in the UK. Governor Mervyn King, David Miles and Paul Fisher argued however that “the news on activity on the month had been reassuring but the outlook was no stronger than had been incorporated
into the May Inflation Report projections.” They suggested that the recovery was not as strong as would be desired and that unemployment was still high. The unstable situation in the Eurozone could also harm the UK economy. Therefore, “additional asset purchases now would allow an earlier normalization of the monetary stance.”

As this was the last BoE monetary policy meeting chaired by Governor Mervyn King, MPC members thanked him for his work over the years.