Two MPC members called for even more QE in February

The Bank of England's Monetary Policy Committee (MPC) was divided over its quantitative easing programme earlier this month, with two members calling for the asset purchase programme to be increased by £75bn.

According to the minutes of the last meeting in early February, when the MPC opted to expand QE by £50bn to £325bn, David Miles and Adam Posen broke ranks and called for even more stimulus.

"Two members of the Committee voted against, preferring to increase the size of the asset purchase programme by £75bn to a total of £350bn," the minutes said.

However, with markets expecting £50bn, and the MPC not wanting to spook investors, it opted for the lower amount.

The minutes said: "An increase of £50bn in the stock of asset purchases would represent a material monetary stimulus, and it was not clear that a stimulus larger than that was warranted at the current juncture.

"In addition, given market expectations, a larger increase risked sending a signal that the Committee thought the economic situation was weaker than it was."

The minutes also reveal the MPC remains concerned of the potential for inflation to undershoot the official 2% target, despite improvements in the global outlook - particularly in the US.

It said: "The weak near-term outlook for growth and the associated downward pressure from slack in the economy meant that, without further monetary stimulus, it was more likely than not inflation would undershoot the 2% target in the medium term."

Overall the MPC said the picture for CPI inflation over the longer term remains clouded, with risks inflation "might prove more persistent" than expected.

However, with the headline figure tumbling as broadly forecast by the MPC - it fell to 3.6% in January, according to the latest data, down from 4.2% in December - the MPC said on balance £50bn was warranted.