The Bank said further cash injections could lead to asset bubbles The Bank of England's Monetary Policy Committee (MPC) voted unanimously not to pump more money into the economy this month, meeting notes have shown. The decision brought to an end, for now at least, the Bank's £200bn quantitative easing (QE) programme designed to stimulate the economy. MPC members felt that further cash injections could lead to asset bubbles. The committee members were also unanimous in their decision to keep interest rates at a record low of 0.5%. "All members felt that the arguments in favour of leaving the size of the asset purchase programme unchanged at this meeting were more persuasive. But for some members, the arguments were finely balanced," the meeting's minutes said. Inflation forecasts The Bank has said that it could restart the programme should economic conditions not improve sufficiently. Under QE, the Bank pumped new money into the economy by buying assets, such as government bonds, in an attempt to boost lending by commercial banks. The arguments in favour of continuing the QE programme included February's Inflation Report projection which indicated that consumer price index (CPI) inflation was "more likely" to be below its 2% target for much of the three-year forecast period. However, the argument cited in the minutes for leaving the QE programme on pause also used the Inflation Report, saying said that the projection "did not imply an overwhelming risk" of inflation being below the target for the next three years. Figures released on Tuesday showed UK CPI inflation rose to an annual rate of 3.5% in January, up from 2.9% the month before. As the figure was more than one percentage point above the 2% target, this triggered a letter of explanation from Bank of England governor Mervyn King to the chancellor.



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