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Bank of England says no to more QE
The Bank of England has left interest rates at a record low and decided against re-starting its bond buying programme, marking a final defeat for Sir Mervyn King - the retiring governor who has been arguing for more stimulus.

With signs that economic growth has strengthened since last month's policy meeting, economists were almost certain that the Monetary Policy Committee would vote against adding to the £375bn of government bonds bought between March 2009 and October 2012.

Thursday's meeting marked Sir Mervyn's last monetary policy meeting after 16 years of rate-setting at the helm of the central bank.

"The Bank of England's Monetary Policy Committee today voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5pc," the central bank said following an ordinary two-day meeting.

"The Committee also voted to maintain the stock of asset purchases financed by the issuance of central bank reserves at £375bn."

Minutes of the monthly meeting, explaining the reasons behind the voting pattern of the Committee's nine members including Sir Mervyn, will be published on June 19.

How Sir Mervyn voted will not be confirmed until then, but he has been arguing since February, along with two other policymakers, for an extra £25bn of bond purchases to boost the sluggish economic recovery.

But they look set to remain in the minority on the nine-member MPC, most of whom are likely to feel that signs of a recovery in the British economy mean there is no need for extra stimulus now.

Referring to Sir Mervyn's love of cricket, Investec economist Philip Shaw pubished a note on the decision entitled 'Out for 194'. "In Sir Mervyn Kings 194th and final MPC meeting, the committee held the stance of policy steady as expected," he said.

If the forthcoming minutes do show that Sir Mervyn unsuccessfully continued to press to restart the money printing programme, that would mean he has been outvoted more times this year than over the remainder of his decade-long tenure as governor, Mr Shaw pointed out.

"Attention will now focus on whether the signs of an upturn in the domestic economy are genuine and the direction in which the incoming Governor, Mark Carney, nudges his committee," he added.

"The economy has suffered false starts before and the notion that Dr Carney will be satisfied with 'green shoots' is less than compelling bearing in mind that the UK is still vulnerable to a number of downside risks."

Sir Mervyn's 's retirement at the end of the month will mark the end of an era. He has voted at every MPC meeting since the BoE became independent in 1997 and was a driving force behind the asset purchase policy also known as quantitative easing.

Mark Carney, who stepped down as Bank of Canada governor last week, takes over on July 1. Many economists expect he will try to get the BoE to commit to keeping interest rates low, a new tool for the central bank which its policymakers have opposed to date.

The European Central Bank also opted not to change its interest rates on Thursday. In the US, the Federal Reserve is considering whether to start slowing its asset purchases this year as the economy picks up speed.

Analysts rate the chances of Mr Carney restarting the BoE's bond purchases this year at just under 50pc.

Britain's economy grew a faster-than-expected 0.3pc in the first three months of 2013, and purchasing managers' data this week support the BoE's forecast that it will expand by 0.5pc in the second quarter of the year.

Although some data such as official retail sales numbers have been disappointing, the central bank will also have been cheered by a slowing in consumer price inflation to 2.4pc, the closest it has been to its 2pc target since September.

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