LONDON (SHARECAST) - Bank of England policy makers voted unanimously in September to keep its asset purchase scheme steady but there were signs the printing presses could be turned on again soon.
The latest details of their meeting showed most members found the decision to keep quantitative easing (QE) at its current level "relatively straightforward".
November remains many economists' best bet for more QE after the minutes of this month's Monetary Policy Committee (MPC) meeting showed there was an appetite for further stimulus.
November is also the month the Bank of England expects to complete its latest round of QE, having voted in July to increase the asset purchase scheme by £50bn to £375bn.
However, experts are divided on whether another interest rate cut is in the pipeline.
Details of the September discussions showed that although some members "felt that additional stimulus was more likely than not to be needed in due course...others saw the risks to inflation in the medium term as being more balanced around the target".
The Committee saw inflation falling back more slowly than previously anticipated, but noted growth was expected to be “subdued and uncertain”.
It seems only one person at the meeting - which experts said was likely to be David Miles - wavered on voting for more QE.
The minutes noted that "for one member, the decision this month was more finely balanced, since it was not clear that the uncertainties about the medium-term outlook would be resolved to any great extent in the coming months and, given the weakness in demand, a good case could be made at this meeting for announcing more asset purchases".
With inflation falling and extra stimulus measures recently announced by the US Federal Reserve and by the Bank of Japan, there are expectations that the Bank of England will follow suit in the near future.
Martin Beck, UK economist at Capital Economics said he expected another £50bn of asset purchases to be announced at November’s meeting and for QE to ultimately reach £500bn.
"We also think there continues to be a decent chance of an interest rate cut in November," he said.
However, IHS Economist, Dr Howard Archer, said "the fact that some other MPC members 'saw the risks to inflation in the medium term as being more balanced around target' suggests that further QE in the fourth quarter is not a nailed-on certainty".
He added that he believed an interest rate cut from 0.50% to 0.25% was "a much longer shot".
Policy makers also discussed the recently launched Funding for Lending Scheme (FLS), which, while still in its early stages, had the potential to reduce funding costs and to encourage the supply of credit, they said.
However, they also noted that heightened uncertainty, stemming especially from the euro area, and risk aversion on the part of households and businesses might limit the demand for credit, making the impact of the FLS difficult to predict.
LONDON (SHARECAST) - Bank of England policy makers voted unanimously in September to keep its asset purchase scheme steady but there were signs the printing presses could be turned on again soon.
