MPC minutes reveal divisions over further QE

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The Bank of England's Monetary Policy Committee is split over whether to commit to further quantitative easing, according to minutes from this month's meeting.

While the Committee voted 9-0 to keep rates on hold and asset purchases unchanged at £375bn, there were "differences of view"  regarding the need for more QE in future.

A fresh round of easing is widely anticipated in November, but the minutes revealed some members have their doubts.

"There were some differences of view between members about the outlook and the likelihood that further easing in policy would be required," the minutes said.

"[Some members], while acknowledging that asset purchases had the scope to lower long-term yields further, questioned the magnitude of the impact that lower long-term yields on corporate debt and equity would have on the broader economy at the present juncture."

Capital Economics' chief UK economist Vicky Redwood said the minutes make the prospect of fresh asset purchases in November "a close call".

"Interestingly, the minutes suggest that the Committee is not too worried about the deterioration in the near-term inflation outlook (although the meeting took place before the latest announcements of utility price rises) and saw little change to the medium-term outlook for growth and inflation," Redwood added.

The MPC's next meeting, scheduled for 7-8 November, will take place as the Bank is preparing forecasts for the quarterly Inflation Report, due out on 14 November.

The minutes also noted that output had been broadly flat since mid-2010 and recent business surveys were consistent with broadly flat output for the remainder of 2012, a weak path that the MPC had anticipated in August.

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