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BoE voted 6-3 for £50 billion QE increase

Mervyn King - Only third time Bank of England Governor outvoted
Mervyn King - Only third time Bank of England Governor outvoted

Bank of England Governor Mervyn King and two other Monetary Policy Committee members wanted to raise the quantitative easing programme by £75 billion sterling this month but were outvoted by the remaining six policymakers.

The 6-3 vote revealed in the minutes of the MPC's August 5-6 meeting - published today - is likely to send shockwaves through markets which were expecting a unanimous vote in favour of the £50 billion decision.

If anything, analysts were predicting that any dissenters would have wanted a lower increase given the £50 billion rise was itself a massive jolt to markets which had been split over whether the BoE would increase at all.

This was only the third time that BoE Governor Mervyn King has been outvoted since he took office in July 2003 and is likely to raise expectations that the MPC could still increase the QE total further in coming months.

All members were agreed on keeping rates steady at 0.5% and on the need for 'substantial' further asset purchases. But there were arguments for both a 'considerable' and 'more moderate expansion' of the QE programme.