Pound retreats as MPC split over QE debate

<p>The pound has retreated as minutes from the last MPC meeting indicate a split over upping QE.</p>

The pound has retreated in forex trading this morning (February 20th), as the Bank of England's (BoE) policymaking council appears divided over whether or not to sanction further monetary easing to stimulate the economy.

According to minutes from the Monetary Policy Committee (MPC) meeting at the beginning of the month, six individuals voted against expanding the bank's current programme of quantitative easing (QE), while three people elected in favour of upping the current £375 billion total.

Governor of the BoE Sir Mervyn King was in favour of increasing asset purchases, but he was in the minority.

Despite this defeat, the markets believe the vote is indicative of a chance QE could be increased at a later date.

The last time the MPC elected to raise its bond-buying programme was in July 2012, when the committee upped the total by £50 billion.

At 11:15 GMT, the pound was lower against the majority of its trading partners, sliding by 0.7 per cent against the dollar to $1.531 and retreating by 0.7 per cent against the Chinese yuan to 9.560 yuan.

Learn about the sterling and forex trading at City Index.

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.