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Bank governor and three others on MPC outvoted on raising QE

Three Bank of England Monetary Policy Committee members, including Bank governor Sir Mervyn King, voted to boost the quantitative easing programme by £50bn at June’s meeting.

Sir Mervyn, David Miles and Adam Posen all wanted to increase the size of the asset purchase programme by £50bn to £375bn. Paul Fisher preferred to increase it by £25bn to £350bn.

However, the overall vote was not to increase it.

There was a unanimous vote to hold the bank rate at 0.5%.

The committee acknowledged further stimulus was likely to be required at some point.

But most members noted there were several key events coming up that could have a material bearing on the eurozone crisis and there was merit in waiting to see how matters evolved.

That would allow time to assess any policy recommendations made by the Financial Policy Committee.

It would also provide the possibility of other policy tools, designed to ease bank funding costs, to be explored.

Most members thought the reduction in market interest rates that had occurred over the month had provided some additional monetary stimulus.

Some members were concerned about the possible persistence of above-target inflation rates.

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