Adam Posen switched his vote on quantitative easing at the last meeting of the Bank of England’s (BoE) Monetary Policy Committee (MPC), clearing the way for a possible pause in quantitative easing (QE) in May.
Bloomberg reported Wednesday that BoE minutes revealed a shift in Posen’s vote as he ceased to urge additional QE. He and David Miles had been urging a boost in QE as a means of combating recession, but with inflation continuing to hover above its target range, Miles remained the sole vote among the nine members to expand the policy.
The minutes said, “There was a greater chance than before that above-target inflation would persist into the medium term. For one member, the balance of risks continued to warrant an expansion of the asset-purchase program this month, although the decision was finely balanced.”
Committee members agreed upon another month of asset purchases in the amount of 325 billion pounds ($517 billion), but in May they will decide whether to continue additional QE based on quarterly forecasts. Although the International Monetary Fund (IMF) said Tuesday that BoE could possibly loosen policy even more to encourage growth, inflation accelerated unexpectedly for the first time in six months.