Minutes from the Bank of England's Monetary Policy committee have revealed how the group voted unanimously to pump £75bn into faltering economy through Quantitative Easing.
The minutes show how the nine member committee considered pumping between £50bn and £100bn into the economy before finally agreeing on spending £75bn on buying up Government bonds. The minutes state:
The scale of the downward reassessment of the medium-term inflation outlook suggested that substantial further asset purchases were appropriate. In terms of the immediate decision, the Committee considered a range of asset purchases of between £50 billion and £100 billion. Committee members agreed that differences in the impact of asset purchases within this range were, in current
conditions, likely to be outweighed by the degree of uncertainty about the outlook for inflation.
The decision surpirsed some analysts who had expected up to £50 billion of QE possibilty at a later date.The committee considered that the need to act "quickly and decisively" overrode any inflationary fears.
However this view was thrown into doubt after this week's CPI and RPI inflation figures hit record highs 5.2 and 5.6 per cent, respectively.
Former MPC member, Sushil Wadhwani, part of a group of leading economists writing in last week's issue of the New Statesman, has suggested that instead of buying up gilts, freshly printed cash should be handed to the public instead.