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MPC minutes reveal King voted to increase QE by £50bn

Three members of the Bank of England’s Monetary Policy Committee, including Bank governor Mervyn King, voted in favour of boosting the quantiative easing programme by £50bn at June’s meeting.


King, David Miles and Adam Posen all wanted to increase the size of the asset purchase programme by £50bn to £375bn.

While Paul Fisher preferred to increase the size of the asset purchase programme by £25bn to £350bn.

Regarding bank rate, the committee voted unanimously in favour of keeping it on hold at 0.5%.

While acknowledging that further stimulus was likely to become warranted at some point, most members noted that there were several key events occurring over the coming weeks that could have a material bearing on the situation in the euro area and that there was merit in waiting to see how matters evolved.

That would also allow time for an assessment of any policy recommendations made by the Financial Policy Committee and for the possibility of other policy tools, designed to ease bank funding costs, to be explored.

Most members felt any reduction in market interest rates that had occurred over the month had already provided some additional monetary stimulus. And some of these members remained concerned about the possible persistence of inflation at above-target rates.


Mortgage prisoners put the squeeze on RMBS

A quarter of the UK’s 200,000 sub-prime borrowers are unable to refinance their mortgage, with ’mortgage prisoners’ accounting for up to 30% of some lenders’ residential mortgage backed securities. Moody’s Credit Insight report last week warned that RMBS transacted between 2006 and 2007 contain the highest number of mortgage prisoners because older transactions benefited from […]

UK inflation falls to 2.8%

The Office for National Statistics has revealed the annual inflation rate decreased in May, as consumer price index inflation fell to 2.8% from 3%, fuelled by a drop in petrol prices.

Government loans to offer lenders a lifeline

Mortgage lending is set to receive a boost under government proposals to offer cheap loans to banks through its funding for lending scheme. Delivering their annual Mansion House speeches to the City last week, chancellor George Osborne and Bank of England governor Sir Mervyn King revealed an ambitious scheme to boost mortgage and business lending. […]

Artemis Investments’ Outlook for 2016

Political change and the ‘normalisation’ of interest rates mean 2016 is likely to be another interesting year. But what will it bring for equities – and bonds? Here, a number of Artemis’ managers share their views. Click here to read the full article


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