Records of Bank of England policymakers’ two day meeting showed that they considered the need for more quantitative easing (QE) amid fears that Britain could slip into double-dip recession.
Bank’s Monetary Policy Committee also expressed concerns that the economic growth of the country could be hit hard by Chancellors Osborne’s emergency budget, which introduced austere measures to hack budget deficit.
The QE has been held at £200 billion since the last £25 billion rise in November.
Released minutes of the meeting held on July 7 and 8 showed that the MPC was concerned over deteriorated economic conditions in June. The rate-setting committee also was of the view that softening of the gross domestic product would exert downward pressure on inflation.
Meanwhile, Bank of England's chief economist Spencer Dale has said that he didn’t expect inflation to come down to official target of 2 per cent before the end of next year. In an interview with The Independent newspaper, Mr. Dale said that inflation emerged a little higher than expected.
Speaking on the topic, he added, “The news on VAT in the June budget means that the time it will take inflation to get back to target will be pushed out, and I expect it will be above target until the end of next year.” Economists expect the Bank to keep interest rates at their record low of 0.5 per cent until well into 2011.