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Mpc Voted 9-0 To Continue Quantitative Easing

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MPC voted 9-0 to continue quantitative easing

The Monetary Policy Committee (MPC) has voted unanimously to continue its £125bn asset purchase programme and to keep the Bank of England (BoE) base rate at 0.5 per cent, according to its latest minutes published today (17 June).

In the meeting held in the first week in June, the MPC decided that despite the recent positive signs of economic recovery, it was still too early to conclude that "the medium-term outlook for the economy, and thus inflation, had changed materially".

The minutes said: "Overall, the risk of a continued sharp contraction in output in the near term had receded somewhat. However, there was no reason to conclude that the medium-term outlook for the economy, and thus inflation, had changed materially."

All nine members of the MPC voted to hold rates at 0.5 per cent and continue with its £125bn quantitative easing programme.

The minutes read: "At its May meeting, the committee had judged that Bank Rate should be maintained at 0.5 per cent and that the asset purchase programme should be expanded to a total of £125bn.

"While the near-term prospects had improved somewhat the balance of risks to inflation further out had not altered materially since then."

The committee cautioned that even though developments over the month had been positive, the increase in confidence apparent in some financial market indicators and some household and corporate sector surveys remained fragile.

It said: "Adverse shocks had the potential to derail the improvement in confidence and forestall the recent improvement in economic conditions.

"Significant risks remained domestically and overseas. Developments over the month had not altered the key downside risks to the medium-term outlook that had been identified in the inflation report. In particular, the outlook for credit supply remained constrained."

Printy printy continues...

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