Widening rifts among the Bank of England’s rate-setters over whether to pump billions more into the lacklustre UK recovery left next month’s crucial meeting on a knife-edge today.
The monetary policy committee’s current £50 billion tranche of money printing expires at the end of this month, paving the way for a decision on expanding quantitative easing, which stands at £375 billion.
Minutes of the MPC’s October meeting said “some members”, code for a minority of the nine-strong committee, “felt that there was still considerable scope for asset purchases to provide further stimulus”, while others are beginning to question the effectiveness of the policy.
Capital Economics’ Vicky Redwood said more QE looked a “close call”, with official estimates for growth between July and September, certain to confirm the country’s pull out of a double-dip recession, due next week.
IHS Global Insight’s Howard Archer said: “Much could yet depend on just how much GDP rebounded in the third quarter and how the early survey evidence for the fourth quarter shapes up.”
The minutes were published alongside upbeat jobs data showing record employment between June and August, although an Olympic hiring spree is likely to have been behind the spurt with more than 100,000 jobs added in London.
