The stage is set for even more fierce debate over the recovery's health this week amid increasingly public splits among the Bank of England's rate-setters over whether to pump more cash into the economy.
This week's meeting marks the third anniversary of interest rates reaching their all-time low of 0.5 per cent and the start of the Bank's quantitative easing programme to kick-start growth.
The Bank sanctioned a further £50bn of QE last month – taking the total to £325bn – to spur on an economy sapped by the eurozone debt crisis. The Bank's nine-strong Monetary Policy Committee was unanimous over the need to restart QE last October, but the MPC's hawks are increasingly nervous about the threat of inflation as oil prices spike.
Martin Weale, an MPC member who voted for interest rate rises last year, voiced fears over "persistent" inflation this week and called for QE to be wrapped up when the current programme ends in May.
But committee doves Adam Posen and David Miles called for the Bank to go further with £75bn last month, amid fears that the damage wrought by the recession was so severe that it has permanently impaired the economy's ability to grow. Minutes of the meeting, published in two weeks' time, will be scoured for hints on who is gaining the upper hand.Reuse content