Bank of England Votes Together Against More Quantitative Easing, At First Mark Carney Meeting

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A plaque depicting Britannia is seen on the outside of the Bank of England in the City of London
A plaque depicting Britannia is seen on the outside of the Bank of England in London.

In the first Bank of England meeting led by new bank Governor Mark Carney, policymakers all voted against increased bond buying, or quantitative easing, in the near future, reports Reuters.

It’s the first time policymakers have reached a consensus against stepping up bond purchases since October 2012.

Former bank Governor Mervyn King, along with two other monetary committee members, previously backed an extra 25 billion pounds ($37.8 billion) of bond purchases, on top of an existing 375 billion pounds of purchases.

The minutes from the July 3-4 meeting, released Wednesday, note that even though some policymakers generally saw asset purchases as a useful stimulus tool, “an expansion in the purchase program was not warranted at this meeting.”

For others, though, the benefits of quantitative easing outweighed their cost. “In particular, further purchases could complicate the transition to a more normal monetary policy stance at some point in the future,” read the minutes.

The committee said it’d investigate other stimulus measures this month, with more concrete measures slated for release a few days after its next Aug. 1 meeting.

One specific measure the central bank could adopt would be to give long-term interest rate guidance, as requested by U.K. Chancellor and finance chief George Osborne.

Carney gave guidance on future interest rates while leading the Bank of Canada in 2009, a move which gave him a reputation for bold economic thinking.

Osborne also told reporters last week that clearer guidance on monetary policy would be welcomed by U.K. households, and said that “monetary activism” from central banks was still required by the world’s economies.

The bank maintained interest rates at 0.5 percent in early July, noting that a weak economic recovery appeared to be ongoing. The last time the bank changed its interest rate was in March 2009, the same time it began quantitative easing.

Britain’s overall unemployment rate has held steady at 7.8 percent, with 2.51 million Britons unemployed, in the latest official labor statistics released Wednesday. 

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