Bank of England voted 5-4 against more QE stimulus

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. "Regarding Bank Rate, the Committee voted unanimously in favour of the proposition" to keep the level at 0.50 percent after ruling out a cut, the minutes said. "Regarding the stock of asset purchases (QE), five members of the Committee... voted in favour" of the status quo. "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 there," the minutes added. The BoE said that King, along with two other MPC members voted to pump out an additional £50 billion of stimulus, while one member -- Paul Fisher -- suggested an increase of £25 billion. The central bank has injected £325 billion of new money into the economy since early 2009 -- but analysts argue that more is needed because the country is back in recession. Following the latest minutes, they meanwhile suggested that more QE was just around the corner. "June's MPC minutes left an extension of quantitative easing within the next month or two looking even more likely," said Vicky Redwood, chief UK economist at the Capital Economics research group. Under QE, the bank creates new cash to purchase assets such as government and corporate bonds with the aim of boosting lending and economic output. The BoE's main task is to use monetary policy as a tool to keep annual inflation close to a government-set target of 2.0 percent. Official data published on Tuesday showed inflation fell to a rate of 2.8 percent in May -- the lowest level for more than two years.