Carney’s first MPC meeting unanimous in vote to hold QE

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The monetary policy committee unanimously voted to hold quantitative easing at £375bn in July, minutes from Bank of England governor Mark Carney’s first meeting show.

MPC minutes from its 5 and 6 July meeting, published today, show member were united in voting to hold interest rates at 0.5 per cent and QE at £375bn despite three members voting to raise it by a further £25m last month.

Paul Fisher and David Miles both changed their vote this month to hold QE, while former governor Sir Mervyn King, who voted for more QE in June, has now left the committee.

The July minutes show the committee was concerned about recent market volatility after the US Federal Reserve signalled it would be withdrawing QE.

It re-iterated its intention to keep interest rates low for some time, claiming recent positive economic data is not enough to warrant rate rises.

The minutes state: “For most members, the current policy setting was appropriate and the onus on policy at this juncture was to reinforce the recovery by ensuring that stimulus was not withdrawn prematurely, subject to keeping inflation on track to hit the 2 per cent CPI inflation target in the medium term.

“The recent rise in market interest rates, were it to be maintained, would represent such a premature withdrawal, but the proposed statement from the committee should help to prevent that.”

The minutes also credited the funding for lending scheme with improving UK lending conditions and said it could precipitate growth on the back of an improving housing market and consumer spending.

It said it expects CPI inflation, which hit 2.9 per cent in the year to June, to fall back to 2 per cent as “external price pressures” fade.