However, regarding the asset purchase programme, the MPC minutes did say: “But for some members, the arguments were very finely balanced.”
The reason given for the decision came as they looked at economic outlook for the UK: “Economic activity was recovering, but only weakly. The monetary and real GDP data had been disappointing, although the latter might be understating the true pace of the economic recovery. But there were some positive indicators, too. While based on uncertain data, nominal demand was estimated to have recovered in the third quarter, the labour market was stabilising, and there was some survey evidence of a pickup in business and consumer confidence. Retail sales, car registrations and the housing market also pointed to a resumption of household spending and a recovery in confidence. And the global economy was continuing to recover, albeit less markedly in some of the United Kingdom’s main trading partners than elsewhere.
“… maintaining the current stance of monetary policy, without adding further stimulus, would allow the Committee an opportunity to judge more thoroughly the effects of the cumulative loosening of monetary policy that it had implemented since September 2008. In particular, while Committee members agreed that the stock of past asset purchases would continue to impart a significant monetary stimulus for some time, views differed about the precise duration and size of that stimulus. It would also enable the Committee to assess the strength of the emerging economic recovery as more reliable data became available.
“The Committee would be able to provide further monetary stimulus should the outlook for inflation in the medium term warrant it.”
