LONDON Nov 8 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
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.