Bank of England on Verge of Stimulus

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.

There is not an ability of central banks to take all these risks out or set the seeds for a sustainable recovery Bank of Canada Governor Mark Carney, urging central banks to secure “escape velocity” for their economies, said there is still room for more monetary stimulus around the world if needed. In comments that may shed light on his thinking as he prepares to take over the Bank of England in July, Carney said policy in developed countries isn’t “maxed out” and that central bankers can be flexible in meeting inflation goals.

WASHINGTON – The Federal Reserve on Wednesday left in place its monthly US$85-billion bond-buying stimulus plan, saying economic growth had stalled but indicating the pullback was likely temporary. Describing the nation’s job market as continuing its modest pace of improvement, the Fed repeated a pledge to keep purchasing securities until the outlook for employment improves substantially.

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.

Mark Carney says his role when he takes over the Bank of England this year will be to help with its “re-founding” and to encourage broader talks on improving Europe’s economic performance.

Minutes of the BoE’s last policy meeting showed officials split 5-4 against launching a new round of monetary stimulus

WASHINGTON — Federal Reserve Chairman Ben Bernanke strongly defended the U.S. central bank’s bond-buying stimulus before Congress on Tuesday, saying its benefits clearly exceed possible costs. The Fed chairman also urged lawmakers to avoid sharp spending cuts set to go into effect on Friday, which he warned could combine with earlier tax increases to create a “significant headwind” for the economic recovery.