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Member of MPC voted for extra QE

BANK of England Monetary Policy Committee member David Miles voted un-successfully to provide further stimulus to the struggling UK economy at the MPC's meeting two weeks ago, it has emerged.

Minutes of the MPC's November 7 and 8 meeting, published yesterday, show Mr Miles voted on his own to increase the scale of the Bank's quantitative easing (QE) programme by £25 billion to £400bn.

The other eight MPC members, including Bank Governor Sir Mervyn King, voted to hold QE at £375bn.

The November split on the MPC followed three consecutive monthly meetings at which the com-mittee voted to hold QE at £375bn, having raised it by £50bn to this level in July.

QE is aimed at stimulating economic activity by boosting money supply through the purchase of Government and corporate bonds, funded through the issuance of central bank reserves.

Explaining the reason behind Mr Miles' vote, the minutes state: "Although it was unlikely that inflation would fall very substantially below the target in the medium term, the degree of slack in the economy, and the likely response of supply capacity to increased demand, meant it would be possible to achieve higher output growth without causing any material inflationary pressure.

"That would help to avoid potentially lasting destruction of productive capacity and increases in unemployment."

All nine members voted to hold base rates at 0.5%.

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