Bank committee stops governor from printing more money

Wednesday 19th August 2009

The Bank of England governor was prevented from injecting an extra £25 billion into the UK economy this month, minutes have revealed.

Mervyn King had wanted to buy £75 billion worth of financial assets from banks and financial institutions but the monetary policy committee voted 6-3 against him.

The majority of the committee, including the Bank's deputy governors Charles Bean and Paul Tucker, disagreed, favouring just a £50 billion extension of their quantitative easing programme.

The minutes from the August 5th/6th meeting, where interest rates were held at 0.5 per cent, reveal a split in how deep the MPC believes the recession to be.

The level of quantitative easing, sometimes equated to printing money, came as a surprise to analysts earlier this month who expected just an extra £25 billion.

In voting against the governor, only the third time Mr King has felt such a setback, the committee members said they felt the "most immediate downside risks to the economy seemed to have receded". ADNFCR-1783-ID-19319467-ADNFCR

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