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Mervyn King likely outvoted for fifth and final time on bid for further QE Mervyn King apparently outvoted for fifth and final time on bid for more QE
(about 2 hours later)
Outgoing Bank of England governor Sir Mervyn King has been denied his parting wish for more stimulus to lift the UK economy at his final meeting of the monetary policy committee. Outgoing Bank of England governor Sir Mervyn King has been denied his parting wish for more stimulus to lift the UK economy at his final meeting of the monetary policy committee. The central bank left interest rates on hold at 0.5% and refrained from implementing a fresh round of quantitative easing (QE) on Thursday.
The central bank left interest rates on hold at 0.5% and refrained from implementing a fresh round of quantitative easing (QE) programme on Thursday. That means King was probably outvoted for the fifth time running. For the past four months, three MPC members, including King, have advocated a £25bn extension of QE, but have been outvoted by their colleagues, who are concerned that inflation remains well above the government's 2% target.
That means King was likely outvoted for the fifth time running. For the past four months, three MPC members, including King, have advocated a £25bn extension of QE, but were outvoted by their colleagues, who are concerned that inflation remains well above the government's 2% target. Howard Archer of IHS Global Insight said the committee would go for more QE "eventually" but it would probably be a way to welcome incoming governor Mark Carney, rather than a parting gift for King.
Howard Archer of IHS Global Insight said the committee would go for more QE "eventually" but it would likely be a way to welcome incoming governor Mark Carney, rather than a parting gift for King. "Carney will only have one vote out of nine in the MPC, as does King, but we suspect that he will be able to carry a majority of MPC members with him should he favour more help for the economy (which we believe he will unless there is sustained clear overall improvement in the data over the coming weeks)," he wrote.
"Carney will only have one vote out of nine in the MPC as does King, but we suspect that he will be able to carry a majority of MPC members with him should he favour more help for the economy (which we believe he will unless there is sustained clear overall improvement in the data over the coming weeks)," he wrote. Recent surveys suggest the UK economy regained some of its former vibrancy in May after a bigger than expected surge in services activity showed that all major sectors are now growing for the first time in a year.
Recent surveys suggest the the UK economy regained some of its former vibrancy in May after a bigger than expected surge in services activity showed that all major sectors are now growing for the first time in a year.
Following figures earlier this week that found the construction and manufacturing sectors back in positive territory during May, the CIPS/Markit survey of the services sector showed it too expanded more strongly than expected.Following figures earlier this week that found the construction and manufacturing sectors back in positive territory during May, the CIPS/Markit survey of the services sector showed it too expanded more strongly than expected.
The broad-based recovery is likely to end the debate about a triple-dip recession, especially after the economy grew in the first quarter of the year by 0.3%. It is now showing every sign of outstripping that figure in the second quarter.The broad-based recovery is likely to end the debate about a triple-dip recession, especially after the economy grew in the first quarter of the year by 0.3%. It is now showing every sign of outstripping that figure in the second quarter.