At its 4-5 July meeting, the Bank of England (BoE) decided to increase the volume of its asset purchase programme - commonly referred to as quantitative easing (QE) - by a further GBP 50 billion to a total of GBP 375 billion. Monetary authorities voted to leave the Bank Rate unchanged at 0.50%. Both decisions were expected by most market analysts, as the Bank had hinted further QE in the previous meeting. According to the minutes, all members of the Committee judged that further economic stimulus was required amid favourable inflation developments and weaker GDP growth prospects. However, measures recently implemented such as the Funding for Lending Scheme (FLS), the activation of the Bank's Extended Collateral Term Repo (ECTR) facility and the prospective relaxation of regulatory liquidity requirements will provide "a potentially significant, but hard to calibrate, additional stimulus". Seven out of the nine members of the Monetary Policy Committee (MPC), including the Bank's Governor Mervyn King, voted in favour of a GBP 50 billion expansion of the asset purchase programme, while the remaining two members voted for leaving the programme's size unchanged. The Committee voted unanimously in favour of leaving the Bank rate unchanged at 0.50%.
United Kingdom Monetary Policy
Bank of England increases QE by GBP 50 billion
July 19, 2012
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United Kingdom Monetary Policy Chart
Note: Bank rate in %.
Source: Bank of England (BoE).
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