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Minutes reveal MPC considered £50-100bn in QE

Minutes from the MPC show unanimous support for £75 billion of quantitative easing.

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.

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Is anyone prepared to solve the NHS funding crisis?

As long as the political taboo on raising taxes endures, the service will be in financial peril. 

It has long been clear that the NHS is in financial ill-health. But today's figures, conveniently delayed until after the Conservative conference, are still stunningly bad. The service ran a deficit of £930m between April and June (greater than the £820m recorded for the whole of the 2014/15 financial year) and is on course for a shortfall of at least £2bn this year - its worst position for a generation. 

Though often described as having been shielded from austerity, owing to its ring-fenced budget, the NHS is enduring the toughest spending settlement in its history. Since 1950, health spending has grown at an average annual rate of 4 per cent, but over the last parliament it rose by just 0.5 per cent. An ageing population, rising treatment costs and the social care crisis all mean that the NHS has to run merely to stand still. The Tories have pledged to provide £10bn more for the service but this still leaves £20bn of efficiency savings required. 

Speculation is now turning to whether George Osborne will provide an emergency injection of funds in the Autumn Statement on 25 November. But the long-term question is whether anyone is prepared to offer a sustainable solution to the crisis. Health experts argue that only a rise in general taxation (income tax, VAT, national insurance), patient charges or a hypothecated "health tax" will secure the future of a universal, high-quality service. But the political taboo against increasing taxes on all but the richest means no politician has ventured into this territory. Shadow health secretary Heidi Alexander has today called for the government to "find money urgently to get through the coming winter months". But the bigger question is whether, under Jeremy Corbyn, Labour is prepared to go beyond sticking-plaster solutions. 

George Eaton is political editor of the New Statesman.