Bank still wants to pump more money into economy

Sir Mervyn and two other members of the Bank’s Monetary Policy Committee pushed for the amount of cash injected into the economy to boost growth to be increased by £25 billion to £400 billion, minutes of the meeting showed.

They failed to persuade fellow committee members, who were likely to have been concerned that the measure would push up inflation. The Bank’s interest rate was held at an historic low of 0.5%.

But figures yesterday showed a fall in consumer price inflation from 2.8% to 2.4%, a development which could give policymakers room to manoeuvre should they feel more stimulus is needed to get the economy moving.

The pound fell back on the possibility of more QE, dropping 0.4% against the dollar to 1.51 and 0.6% against the euro to 1.17.