Quantitative easing news buffets foreign exchanges

Minutes of the November Monetary Policy Committee (MPC) meeting at the Bank of England have been released, showing that opinion among policymakers remains split over quantitative easing.

The pound weakened against the euro on the release of the news today (November 18th), falling from €1.126 to just over €1.122.

According to the document, seven members of the nine-strong MPC voted for a £25 billion increase to the quantitative easing programme.

However, one member voted for no change and another wanted a £40 billion increase.

Quantitative easing, the modern-day equivalent of printing money, is a radical move that has not previously been tried by the bank.

Its eventual effect on the pound, and therefore on the international money transfer sector, is as yet unknown.

Another factor which could affect the foreign exchange markets going forward is rising inflation.

Official government figures showed yesterday that CPI rose from 1.1 to 1.5 per cent during October 2009.

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By John Mills