Bank of England in wait-and-see mode on QE

The Bank of England sent out a signal to the City on Wednesday that fresh action to boost Britain's recession-hit economy could be on the way. Minutes of the meeting of the Bank's nine-strong monetary policy committee held earlier this month revealed Threadneedle Street in "wait-and-see" mode. Only one member of the MPC, David Miles, voted for a fresh dose of money creation through quantitative easing – but the minutes record that for "several members" the decision was finely balanced. The minutes are likely to prompt City speculation that the Bank will respond to the International Monetary Fund's warning that it needs to do more to prevent the UK from being locked into a cycle of low growth and high unemployment. Action last month was ruled out because inflation has been coming down more slowly than expected, but the drop in the annual increase in the cost of living from 3.5% to 3% in April and the intensification of the crisis in the eurozone has made further action from the Bank much more likely. The minutes noted: "The committee would continue to monitor the outlook each month and further monetary stimulus could be added if the outlook warranted it." All nine members of the MPC voted to keep the Bank's key lending rate unchanged at 0.5%.