UK economy will 'fail to pick up' in fourth quarter

Bank of England policymakers agree that Britain's stalled economy will fail to pick up in the current fourth quarter, according to minutes of their last meeting published on Wednesday. The forecast comes as the BoE minutes showed that members of the Monetary Policy Committee voted unanimously at the October meeting to pump £75 billion (£119 billion, 86 billion euros) into the British economy. The MPC also voted 9-0 earlier this month to keep British interest rates at a record low 0.50 percent -- where they have stood since March 2009. In a gloomy warning at the October 5-6 gathering, the MPC said that "available indicators suggested that the underlying rate of growth ... would be close to zero in the fourth quarter", or three months to December. The forecast comes before the first official estimate of British growth in the third quarter, which is due on November 1. Gross domestic product (GDP) -- the value of all services and goods produced in the economy -- grew by just 0.1 percent in the second quarter, according to the latest official reading. Minutes of the BoE's last meeting revealed that the MPC chose to reactivate its quantitative easing (QE) policy with £75 billion of new money -- to try and address "acute" stresses in bank funding markets. "There had been increasingly visible symptoms over the month of rising stress in financial markets as concerns about the vulnerabilities associated with the indebtedness of several euro-area governments and banks had intensified," said the minutes. They added that "short-term funding had become more expensive and difficult to obtain for European banks, including those in the United Kingdom, and investors had continued to shorten the term of the US dollar funding they provided." The Bank of England's main task is to use monetary policy to try and keep inflation close to a target of 2% Between March 2009 and January 2010, the BoE injected £200 billion ($321 billion, 228 billion euros) into the British economy under the radical QE policy, to aid recovery from recession -- but this has not been deemed enough. The minutes were meanwhile published one day after official data showed that British Consumer Prices Index (CPI) annual inflation surged to a three-year high of 5.2 percent in September on soaring domestic energy prices. The Bank of England's main task is to use monetary policy to try and keep CPI annual inflation close to a target of 2.0 percent. BoE governor Mervyn King predicted on Tuesday that inflation "should fall back sharply early next year," and blamed the figures on temporary spikes in energy and import prices. He added that "time is running out" to solve the eurozone debt crisis and urged countries to work together to solve the region's economic woes. Britain, though not a eurozone member, is a key trading partner of the 17-nation bloc.