BoE Holds Off on QE

The Bank of England (BoE) held off at its latest meeting on pouring additional funds into the British economy, opting instead to rely on a new lending scheme devised by the bank as concern over inflation grew.

Reuters reported Thursday that the Monetary Policy Committee (MPC) decided that unexpectedly strong Q3 economic reports justified abstention from additional QE, although should the situation change for the worse that could change. The MPC also kept the main interest rate at 0.5%, a move expected by economists.

While at last month’s meeting MPC member Martin Weale pointed out that another round of quantitative easing could prove to be incompatible with the bank’s inflation target, and BoE chief economist Spencer Dale said that inflation was sticky, inflation actually fell in September to 2.2%. But that is above its 2% target, and it doesn’t include the large price increases from four of Britain’s biggest energy suppliers that have taken effect.