Minutes of the February meeting of the BoE’s Monetary Policy Committee revealed Sir Mervyn and Paul Fisher joined David Miles in calling for quantitative easing to be increased to £400bn.
But they were defeated as members voted 6-3 to keep QE level at £375bn.
The BoE has been buying Government gilts since March 2009 in an effort to boost demand and increase the flow of cash in the economy. But its asset purchase scheme has stalled at £375bn since July 2012, over fears it is losing its effectiveness. Instead, the BOE has resorted to its Funding for Lending scheme, which encourages banks to lend cheaply.
“The committee agreed that it was important to communicate clearly its willingness to bring inflation back to the target over a longer time horizon than usual, and its reasons for doing that,” said the minutes.
“The committee also agreed that it stood ready to provide additional monetary stimulus if warranted by the outlook for growth and inflation.”
Inflation is hovering stubbornly above the BoE’s two per cent target, and the MPC said it is likely to remain there for the next two years. Sterling fell to an eight-month low. The MPC sees a “slow but sustained recovery over the next three years”.