The minutes of the meeting revealed the decision to vote for more QE was finely balanced for “several members” of the committee, though David Miles was the only member to vote for further expansion of the programme.
Minutes from April’s meeting, by contrast, said Miles’ own pro-QE vote was finely balanced but made no mention of other members’ deliberations.
Miles voted for an extra £25bn of QE in May in addition to the £325bn worth of existing asset purchases. All nine members of the committee voted to keep interest rates on hold at 0.5%.
The Bank said the improvement in sentiment seen over the first three months of the year has waned, and said a continued rise in Sterling – the currency’s effective exchange rate has risen 8% since last summer – could have “a material influence on the outlook for growth and inflation in the United Kingdom”.
Sterling extended early morning losses against the dollar following the publication of the minutes, breaking through $1.56 before recovering to stand 0.4% lower at $1.5705. Two-year and five-year benchmark gilt yields dropped to record lows of 0.267% and 0.786% respectively.
The minutes were published as new data from the Office for National Statistics further emphasised the strain on consumers in Q1 as the UK slipped into recession.
UK retail sales figures for April fell 2.3% month on month, well below consensus expectations of a 0.8% drop, with the year-on-year fall of 1.1% also well under the consensus 1% rise.
The monthly decline was driven by a record 13.2% decline in fuel sales from March, when panic-buying of petrol helped produce a 5.3% monthly rise.
