BoE maintains interest rate at 0.5 % but split on QE

The Bank of England on Wednesday decided to keep the base interest rate at 0.5 percent but remained divided over whether to expand its quantitative easing (QE) stimulus program According to minutes of a meeting of the Monetary Policy Committee (MPC) of the central bank, the committee's nine members disagreed over pumping more money into the British economy. Some 375 billion pounds (about 568 billion U.S. dollars) have been so far injected into the British economy through bond buying programs to provide financial stimulus for the flat-lining economy. Outgoing central bank governor Mervyn King was joined by fellow committee members David Miles and Paul Fisher in calling for an increase of 25 billion pounds in stimulus cash. But according to the minutes, most of the MPC members thought the current policy setting was appropriate at this juncture. "GDP growth in the first quarter had been faster than expected and the outlook for activity was stronger than at the time of February Inflation Report," the minutes read. The MPC document held that the effects of the previous round of asset purchases were still working. Together with the Funding for Lending scheme (FLS), which is designed to boost lending to real economy, the effects of the current QE program would continue to boost economic activities. Official figures showed that Britain avoided another recession as its quarterly economic output in the first quarter increased by 0.3 percent. But the overall economic situation in the country remained fragile.