Bank of England opts against cash boost as economy recovers
LONDON Nov 8 (Reuters) - The Bank of England opted on Thursday against pumping more cash into the fragile economy, as policymakers pin their hopes on the bank's new lending scheme and some worry about inflation.
The decision is likely to have been close, with rate-setters having to weigh Britain's surprisingly strong exit from recession in the third quarter against signs of renewed weakness since then.
Several members of the Bank of England's Monetary Policy Committee have voiced concerns over inflation and doubts about the continued effectiveness of its asset-buying programme in boosting the economy.
Central bankers are also hoping their new Funding for Lending Scheme will get credit flowing to households and businesses, but it may take another few months for these effects to show through.
The MPC decided against buying more British government bonds for now, having already purchased 375 billion pounds' worth ($600 billion) since the 2008-09 economic slump.
It also kept its main interest rate at a record low 0.5 percent, in line with a Reuters poll of economists, who had forecast no change in policy.
The BoE will release the minutes of the meeting on Nov. 21.
More QE is still on the cards, with economists pointing to another 50 billion pound dose in the first three months of next year to support the fledgling recovery.
Attention will now turn to the quarterly inflation and growth forecast updates in the BoE's Inflation Report, which Governor Mervyn King will present on Nov. 14.
- Flights delayed as air pollution hits record in Shanghai
- White House reverses, says Obama met uncle and lived with him during law school
- South Africa mourns Mandela, will bury him on December 15 |
- French launch Central African Republic mission but deaths mount
- Supreme Court to decide on patent protections for software