The Monetary Policy Committee of the Bank of England voted unanimously against increasing quantitative easing. All nine members agreed that it was not suitable to increase the programme now. However, they agreed that if they need ed to do so, they could call on further fiscal boosts.
Introduced in March 2009, while the country was rooted deeply in a recession – the worst in over 50 years – the QE programme was the so-called ‘money printing’ measure. In other words, new money was created for asset purchases, which would give the economy a fresh flow of liquidity.
200 billion pounds were earmarked for the scheme, and it was seen to have worked. By the final quarter of 2009, the economy just scraped back into growth.
The MPC are said to be disappointed that the schmeme didn’t bring more growth but would likely reach to it again in future if necessary. Perhaps if inflation doesn’t begin to behave? In January it was well above target at 3.5%; in the medium term it is forecast to be below target (the target being 2%).
After the MPC’s unanimous vote was made public, the pound reacted by rising slightly against the euro.
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