Why more money could be injected into the economy

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quantitative easing
The Bank of England looks likely to implement more quantitative easing Photo: REUTERS/Suzanne Plunkett

The Bank of England looks likely to inject more money into the economy through quantitative easing (QE.)

Minutes of the most recent meeting of the committee which decides how to manage the economy show that the Bank's experts were torn on whether to order more QE or not as they weighed up a weak report on the UK's output.

In the end, stubborly high inflation tipped the balance 8-1 in favour of stopping QE - partly because injecting money into the economy will probably result in pushing prices yet higher; but they were making their decision before knowing the surprise drop in April's inflation (which we discovered yesterday was a fall from 3.5 per cent in March to 3.0 per cent).

Furthermore, the eurozone crisis is getting worse, markets have fallen dramatically and the threat to the UK is marked.

The IMF recommended a raft of measures yesterday to kick start Britain - starting with lower interest rates and more QE.

Today's minutes suggest the Bank may agree with that verdict.