"The effects of the committee's previous round of asset purchases were still working through, and together with the Funding for Lending Scheme, should continue to boost activity"
- MPC members
During his last monetary policy meeting Bank of England's Governor Sir Mervyn King lost his final vote since the majority of policy makers blocked his bid for another expansion of the stimulus programme, as the economic recovery is taking hold. For the fifth consecutive month the monetary policy committee voted 6-3 this month against increasing the asset-purchase programme. Meanwhile, Sir Mervyn King, Paul Fisher and David Miles suggested additional £25 billion are needed. However, all nine members of the MPC voted to keep the benchmark interest rate on hold at 0.5%. Next month Sir Mervyn will step down from his position as the BoE Governor and will be replaced by the former governor of the Bank of Canada Mark Carney.
Under the BoE's quantitative easing programme the bank has injected £375 billion into the struggling economy in attempt to boost growth. And even as the recent data points at overall improvement in economic conditions, the BoE said the outlook is not stronger than estimates in the bank's latest inflation report. Nevertheless, the current measures of stimulations are effective, and according to the policy members are still working through the economy, and together with the Funding for Lending scheme are expected to continue to boost activity.
© Dukascopy Bank SA