Bank of England policymakers unanimously decided to maintain quantitative easing unchanged earlier this month, as economic recovery gains steam even in the absence of additional stimulus.
All the nine members of the Monetary Policy Committee led by Governor Mark Carney voted to retain the size of asset purchase programme at GBP 375 billion as they judged that more stimulus was inappropriate at present. Also, they unanimously decided to keep the record low 0.50 percent interest rate.
"No member judged that further stimulus was appropriate at present," the minutes showed, in contrast to August's view that there is "compelling" case for further stimulus.
The minutes suggested that the case for further stimulus will be stronger only if the recovery falter. The bank lifted its third quarter economic growth projection to around 0.7 percent from 0.5 percent estimated in the August Inflation Report.
There was no mention about the discussion on the recent increase in market interest rates and whether it is consistent with the development in the economy.
At the meeting, all members agreed that none of the three knockout conditions that would invalidate the forward guidance announced in August had been breached. Further, unemployment remained above the 7 percent threshold.
IHS Global Insight's Chief U.K. Economist Howard Archer believes that interest rates could start rising gradually in the fourth quarter of 2015. However, he does not expect the BoE to raise interest rates because of any triggering of the "knockout" clauses relating to inflation and financial stability.
Nonetheless, members had different views about the extent to which a further loosening of the monetary stance might be warranted.
The MPC agreed to reinvest the GBP 1.9 billion proceeds from the redemption of the September 2013 gilt held in the Asset Purchase Facility.
The bank scheduled the date of the next MPC meeting to October 8-9 in order to accommodate some members' attendance at international meetings in Washington DC on October 10.
Data published by the Office for National Statistics today showed that labor productivity in the U.K. was 19 percentage points below the average for the rest of the G7 in 2012.
Vicky Redwood, an economist at Capital Economics, said economic growth over the next few years will be driven primarily by productivity rather than employment gains.
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