The latest Monetary Policy Committee (MPC) minutes from June have indicated that further QE measures are likely to be implemented in July.
Members were split 5-4 against more QE in June, however concerns were raised about the increasing likelihood of a global slowdown. And with economic conditions having deteriorated over recent weeks since the meeting, there is an increased likelihood of members voting for QE next month.
If the Bank were to restart QE, it would be the third time it has been used, building on £325bn already completed. It has been warned by critics that new QE could lead to ‘diminishing returns’ but the Bank stated that its impact on reducing Government borrowing costs has been noticeable.
The minutes stated: “The risks to UK and global activity from financial distress and political tension within the euro area had intensified again.”
It was also revealed that the MPC is increasing concerned about lending constraints on businesses impacting the chances for growth in the economy.