The Bank of England yesterday risked accusations that it was failing to do enough to jump-start the ailing economy as it declined to resume its monetary stimulus programme.
The rate-setting Monetary Policy Committee (MPC) voted against increasing the size of the Bank's £325bn asset purchase scheme, known as quantitative easing, despite the economy falling into its first double-dip recession since the 1970s.
"It's a little bit disappointing," said Philip Shaw of Investec. "The MPC must either be feeling more optimistic over the economy than most observers, or be seriously concerned that inflation will remain above target in the medium term."
Last month the Office for National Statistics estimated that the economy shrank by 0.2 per cent in the first quarter of this year, following a contraction of 0.3 per cent in the final three months of 2011. The MPC, in the minutes of its most recent meeting, said the economy was probably experiencing a healthier level of underlying growth than the official figures have been showing.
- More about: