The Bank of England may return to quantitative easing (QE) at some point as a stuttering recovery may need assistance, according to the Monetary Policy Committee (MPC) notes released Wednesday.
Although MPC members took no such action, and indeed the vote was 8-1 against, they acknowledged in the minutes of their Sept. 7-8 meeting that it was becoming increasingly likely that such an action would be necessary in the future. Currently the bond-buying program stands at 200 billion pounds ($313 billion), and Mervyn King led the majority to vote that it remain at that level. But additional bond buying was advocated by Adam Posen, who proposed an increase of 50 billion pounds.
The vote was unanimous to maintain the current benchmark rate at its record low of 0.5%. However, the discussion did visit methods of loosening policy in light of worsening economic conditions around the globe and a “materially weaker” growth prospect in the second half of 2011.