Bank of England (BoE) governor Sir Mervyn King has lost a vote calling for additional quantitative easing (QE) to boost economic growth in the UK.

In a Monetary Policy Committee (MPC) meeting held on 6 and 7 February, the governor invited the committee to vote on the propositions that the Bank Rate should be maintained at 0.5 per cent and whether the stock of asset purchases financed by the Central bank reserves should be maintained at £375bn.

The minutes of the meeting showed that six members of the committee voted in favour of the proposition compared to three members, which included the governor, who preferred to increase the size of the asset purchase programme by a further £25bn to a total of £400bn.

With regards to inflation, King warned last week that inflation is expected to rise to at least three per cent, and the minutes of the MPC meeting stated that inflation “could remain above the 2 per cent target for the next two years, reflecting sterling’s recent depreciation and the persistent contribution from administered and regulated prices”.

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