Pound firm as Bank of England members support more QE

The pound has remained firm-footed in forex trading today, after four members of the Bank of England's (BoE) Monetary Policy Committee (MPC) announced their support of a further round of quantitative easing (QE).

This follows the news the Consumer Prices Index (CPI) inflation rate is down to 2.8 per cent - its lowest level in two-and-a-half years - leading to calls that the economy needs increased sustainability measures.

Although four members of the MPC have announced they are in favour of more QE, their number was one short of a majority and so the current level of stimulus remains at £325 billion.

The last round of QE was implemented by the BoE in February last year.

Governor of the central bank Sir Mervyn King, Adam Posen and David Miles were in favour of a £50 billion boost to QE, while Paul Fischer wanted to see a £25 billion increase, which aims to support the economy by stimulating lending.

In May, Mr Miles was the only member of the MPC to vote for another round.

In the minutes of the June 6th-7th meeting, all nine attendees of the Committee agreed to maintain interest rates at their record low of 0.5 per cent.

The Bank also aims to get inflation down to two per cent on the CPI measure.

"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," the BoE stated.

At 12:15 BST, the pound held firm against the dollar, appreciating marginally with £1 trading to $1.57.

Sterling rose 0.1 per cent versus the Chinese yuan and less than 0.1 per cent against the Japanese yen, buying 10.00 yuan and 124.25 yen respectively.

And the pound was little changed in trading with the euro, with £1 holding firm and buying €1.23.