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BoE mulls more QE as economy falters

By Sven Egenter and Peter Griffiths

LONDON (Reuters) - Bank of England policymakers left the door open for a new cash injection into Britain's economy in February, central bank minutes showed, as the raging euro crisis and gloomy consumers risk pushing the economy into another recession.

Austerity measures to tackle a hefty fiscal deficit are further straining consumer spending but there was some relief for the government on Wednesday as data showed the budget deficit narrowed more than expected in November.

Minutes to the BoE's December 7-8 meeting showed that all nine policymakers saw little merit in an immediate increase in asset purchases, given high uncertainty about the euro zone and the impact of quantitative easing (QE).

However, some members of the bank's Monetary Policy Committee signaled their readiness to boost the economy further.

"Some members continued to note that the balance of risks to inflation in the November Inflation Report projections meant that a further expansion of the asset purchases program might well become warranted in due course," the minutes said.

"Of those members, some thought that the outlook had deteriorated somewhat on the month," they said.

Others, however, continued to see a risk of inflation falling more slowly than expected, noting continued strength in import and goods inflation.

Analysts said the minutes confirmed the view in financial markets that another cash injection was likely in February.

MORE - http://finance.yahoo.com/news/boe-mulls-more-qe-economy-113905566.html?l=1