FT Alphaville " Bank of England turning dovish The minutes from the latest MPC meeting are out, and it seems the doves are gaining ground: Regarding the stock of asset purchases, five members of the Committee (Charles Bean, Paul Tucker, Ben Broadbent, Spencer Dale and Martin Weale) voted in favour of the proposition. Four members of the Committee voted against the proposition. The Governor, David Miles and Adam Posen preferred to increase the size of the asset purchase programme by £50 billion to a total of £375 billion. Paul Fisher preferred to increase the size of the asset purchase programme by £25 billion to a total of £350 billion. That is, no-one wanted to stop: On balance, most members judged that some further economic stimulus was either warranted immediately or would probably become warranted in order to meet the inflation target. Further stimulus might also help limit any long-lasting erosion of the economy's potential supply capacity. To read the minutes, click below on the document pic: Some quick commentary via SocGen (our emphasis): The persistent weakness of the UK economy and the renewed tensions in the euro area are all pointing to an increase in asset purchases next month. In the Governor's Mansion House speech on 14 June, he hinted at this and then the June minutes have shouted loudly that the Committee is now poised to act. For now, we predict only £50bn more in total but there are risks that the MPC will then decide to do more in due course. The MPC seems to have decided that the pace of purchases that can be most easily digested by the gilt market is £50bn per quarter so, once the increase has been made in July, the Committee can then wait to assess how the macro backdrop unfolds. One should also note that both the Government and the Bank are increasingly prepared to use a wider arsenal of weapons to stimulate the economy. Paul Tucker in particular has suggested that easing liquidity buffers would increase the power of asset purchases and, only today, the first of the (at least) monthly liquidity injections (minimum £5bn per month) via the Extended Collateral Term Repo facility has been made. In addition, we have yet to see the details of the "funding for lending" scheme announced in King's Mansion House speech. And that will not be the last of the Government's efforts to generate some growth. Who moves first then - Mervin, Ben, or Mario? Related links: Minutes of the monetary policy committee meeting, June 2012 - Bank of England Problems with extending Twist, and one final preview - FT Alphaville BoE support for more stimulus grows - FT This entry was posted by Simon Hinrichsen on Wednesday, June 20th, 2012 at 12:38 and is filed under Capital markets. Tagged with bank of england, Minutes.