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Bank of England still divided over stimulus funds | Bank of England still divided over stimulus funds |
(35 minutes later) | |
Members of the Bank of England's rate-setting committee remain divided over whether to inject more stimulus money into the UK economy, minutes of its March meeting have revealed. | Members of the Bank of England's rate-setting committee remain divided over whether to inject more stimulus money into the UK economy, minutes of its March meeting have revealed. |
For the second month, three members, including Sir Mervyn King, voted to extend the quantitative easing scheme. | For the second month, three members, including Sir Mervyn King, voted to extend the quantitative easing scheme. |
However, they were again outvoted by the six others. | |
The release of the minutes comes amid speculation that the chancellor may use the Budget to alter the Bank's remit. | The release of the minutes comes amid speculation that the chancellor may use the Budget to alter the Bank's remit. |
According to reports, the Bank may be given more freedom to target economic growth instead of its current core focus on controlling inflation. | According to reports, the Bank may be given more freedom to target economic growth instead of its current core focus on controlling inflation. |
In addition to governor Sir Mervyn, the two other members of the Bank's Monetary Policy Committee (MPC) who voted to extend the quantitative easing programme by £25bn to £400bn were Paul Fisher and David Miles. | |
One member of the MPC also raised concerns about the continuing weakness of the pound, which has fallen by as much as 8% against the dollar since the start of the year because of fears about the weakness of the UK economy. | |
Ian McCafferty warned that a further fall in sterling could raise inflation, which might have "damaging" consequences. | |
As expected, the MPC decided to keep interest rates at 0.5%, which they have been since March 2009. | |
Philip Shaw, chief economist at Investec, said: "If we get a new remit or a different remit [for the MPC] from the chancellor today, the balance for monetary policy could well change. | |
"But there is nothing from today's minutes that screams out that we are definitely going to get more QE." |
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