BoE still divided on QE expansion at King's last meeting

The Bank of England's Monetary Policy Committee (MPC) voted against governor Mervyn King's call for more easy-money stimulus, minutes showed on Wednesday. The nine-member MPC voted 6-3 to maintain the asset purchase program, or quantitative easing policy, at 375 billion pounds (about 587 billion U.S. dollars). King, who will step down at the end of this month and be replaced by former Canadian central bank chief Mark Carney, and two other members preferred to add 25 billion pounds to boost the lending initiatives and economic growth, but were out-voted by fellow policymakers, according to the minutes of the Bank of England's June 5-6 meeting published on Wednesday. The opposing policymakers argued that "the effects of the committee's previous round of asset purchases were still working through, and together with the Funding for Lending Scheme (FLS), should continue to boost activity." All the nine members decided to keep the key interest rate at a record low 0.5 percent, the minute showed. They also paid tribute to King's decade-long leadership of the British central bank. Regarding the global financial market and economic conditions, the MPC said financial asset prices had been "volatile over the month. In part, this may have reflected shifting views of the outlook for monetary policy in the United States and Japan, following positive activity indicators and comments by policymakers." Meanwhile, the "indicators of activity around the world had been mildly positive, but it remained hard to judge whether the recovery in growth would be sustained," read the minute. The MPC also hailed a rosy picture for the British economic outlook, saying that recent news was consistent with the slow but sustained recovery in growth over 2013 embodied in the May Inflation Report.