BoE chief denied chance to pump extra money
Bank of England Governor Mervyn King wanted the BoE to pump out even more new money into the recession-hit economy than agreed at its recent meeting but was denied by colleagues, it said Wednesday.
King and two other BoE policymakers wanted the Bank of England at a meeting earlier this month to increase its so-called quantitative easing (QE) programme by 75 billion pounds.
However their plan was thwarted as the Monetary Policy Committee's other six members voted in favour of a proposal to increase QE by 50 billion pounds.
"Three members of the Committee (the Governor, Tim Besley and David Miles) voted against (the proposal), preferring to increase the size of the asset purchase programme by 75 billion pounds to a total of 200 billion pounds," said minutes of the meeting.
ING Bank economist James Knightley said it was only the third time since King took charge of the BoE in 2003 that he had been outvoted.
"The fact that the market was expecting the BoE to move by 25 billion pounds at most suggests that it is much more upbeat than the BoE is on recovery prospects," he added.
Also at the two-day meeting that ended on August 6, policymakers voted 9-0 to keep interest rates at a record low 0.5 percent.
The BoE has ramped up its QE scheme -- whereby it buys bonds from commercial institutions -- to encourage lending by commercial banks.
The central bank had launched QE in March, when it also slashed borrowing costs to their all-time low 0.5 percent.
While France, Germany and Japan have all emerged from recession, Britain remains stuck in negative growth as the number of unemployed people in the country rises towards three million.
According to the Bank of England, its main task is to use monetary policy to try and keep annual inflation close to a government-set target of 2.0 percent.