BoE's Monetary Policy Committee split on quantitative easing

The Bank of England's Monetary Policy Committee (MPC) remains split on whether to increase the quantitative easing programme even as it announced it had signalled the Funding for Lending scheme (FLS).

Minutes of the MPC's April meeting showed that six members voted to keeping the QE intact at £375 billion even as concerns grew that extension would see inflation start increasing again affecting the value of sterling.

Continuing to vote for further additions, governor, Sir Mervyn King, Paul Fisher and David Miles argued there was a case to extend the asset purchase programme by a further £25 billion as prospects for growth in the economy remained weak.

The committee, though, saw ''merit'' in a possible extension to the Funding for Lending programme, which was designed to boost credit availability for households and businesses.

According to the minutes: "The committee agreed that a well-capitalised banking system was essential to improving the supply of credit and the supply capacity of the economy in the medium term. The committee also saw merit in possible extensions to the FLS that would boost lending further."

The scheme was launched by the bank and the Treasury last summer to offer lenders funding at low interest rates on condition it was passed on to households and businesses.