The Bank of England is on the verge of approving another round of monetary stimulus, with Governor Mervyn King supporting an extra £50bn of gilt purchases, minutes to its June 6-7 policy meeting showed on Wednesday.
Finance minister George Osborne tweaked the central bank’s mandate two weeks ago, giving it stronger backing to continue ignoring inflation when it overshoots its target due to one-off factors, reports The Telegraph.
But only a handful of economists polled by Reuters last week expect the central bank to add this month to the £375bn of government bonds it bought between March 2009 and October 2012.
LONDON (Reuters) - The Bank of England is close to launching a new round of monetary stimulus because of the worsening euro zone crisis, according minutes of its last policy meeting, which showed officials split 5-4 on the move, with Governor Mervyn King in favor.
Bank of England policymakers voted 5-4 against pumping the recession-hit economy with more new cash under its Quantitative Easing (QE) programme, minutes of a meeting showed on Wednesday.BoE Governor Mervyn King and three other central bank members voted earlier in June for more stimulus -- up to a total of £50 billion -- but they were out-numbered by those wishing to sit tight.All nine members of the Monetary Policy Committee (MPC) meanwhile voted to leave the BoE's main interest rate at record-low 0.50 percent, where it has stood for more than three years.
Bank of England rate-setters remain split over how to strengthen Britain's fragile recovery, as minutes revealed that Sir Mervyn King was again outvoted on more stimulus measures in his final month as Governor.
Sir Mervyn King has blown open the debate about the future of Royal Bank of Scotland by describing the current situation as “nonsense” and calling for the bailed out bank to be broken up into a good and bad bank.
Less than a week after the Edinburgh-based bank insisted it could be ready for partial privatisation ahead of the May 2015 election, the Bank of England governor laid bare his disagreement with the chancellor, George Osborne, over the future of RBS, saying the state-backed bank could not be sold off until it acknowledges the full scale of its bad debts.