BoE united over radical monetary policy

Bank of England policymakers voted unanimously to keep British interest rates at a record low level and to freeze radical credit-easing plans, minutes of a recent meeting showed yesterday.

The central bank's Monetary Policy Committee voted 9-0 in favour of keeping its key lending rate at 0.50 per cent at its last meeting held on February 3-4.

It was also united over a decision to pause its extraordinary policy of pumping billions of pounds of new money into the British economy. "The Committee voted unanimously in favour" of the propositions, the minutes said.

In order to revive the British economy, the Bank of England has pumped £200 billion under the radical policy of quantitative easing.

Introduced last March when the BoE also slashed British borrowing costs to 0.50 per cent, quantitative easing meant that the central bank created money by purchasing bonds from commercial institutions.

The quantitative easing policy was launched in a bid to get banks lending again to businesses and individuals and so help drag Britain out of its worst recession in modern history, which ended in the fourth quarter of 2009.

But the economy grew by just 0.1 per cent in the final three months of last year, well short of market expectations for a 0.4 per cent expansion, sparking speculation that the central bank may decide to revisit quantitative easing.