The minutes of the Septmeberâs MPC meeting are out and â¦ -BOE â DECISION ON QE IN SEPTEMBER WAS FINELY BALANCED FOR MOST MPC MEMBERS - BOE â FOR SOME MEMBERS, CONTINUATION OF TRENDS SEEN IN AUGUST WOULD BE ENOUGH TO JUSTIFY MORE QE - BOE- MPC DISCUSSED OTHER OPTIONS TO EASE IF NEEDED, NONE PREFERABLE TO ASSET PURCHASES AT THIS POINT BOE- MOST MPC MEMBERS THOUGHT IT INCREASINGLY LIKELY THAT MORE QE WOULD BE WARRANTED AT SOME POINT By the tone of Wednesdayâs release the âsome pointâ looks increasingly like Novemberâs meeting, or even Octoberâs. For most members, the decision of whether to embark on further monetary easing at this meeting was finely balanced since the weakness and stresses of the past month had significantly strengthened the case for an immediate resumption of asset purchases. For some members, a continuation of the conditions seen over the past month would probably be sufficient to justify an expansion of the asset purchase programme at a subsequent meeting Indeed, the softening up exercise for QE2 continues in the minutes with another broadside at critics of asset purchases. While there had been little news on the upside risks to inflation, the downside risks had clearly increased further. In the light of that outlook, Committee members reviewed the range of possible policy actions available to them to loosen monetary conditions were that judged appropriate. One possible action was to restart the asset purchase programme. This programme had been primarily focused on purchases of UK government bonds financed by the issuance of central bank reserves. There was inevitable uncertainty about the precise impact of asset purchases on demand and inflation, but asset purchases were an instrument that would continue to be effective in further loosening monetary conditions in the current context. However, we think this is the most interesting paragraph from the September minutes. The Committee also discussed a range of other possible policy options including: changing the maturity of the portfolio of assets held in the Asset Purchase Facility; revisiting the earlier decision not to lower Bank Rate below 0.5%; and providing explicit guidance about the likely future path of Bank Rate beyond the information about the Committeeâs judgement of the medium-term outlook for inflation contained in the Inflation Report and the MPC minutes. At the current juncture, none of these options appeared to be preferable to a policy of further asset purchases should further policy loosening be required. So just like the Fed, the MPC is considering âTwistingâ its portfolio of government paper. And they have weighed the merits of cutting the Bank Rate beyond 0.5 per cent. Interesting times. And for the record: RTRS-BOE MPC VOTED 9-0 TO HOLD RATES UNCHANGED IN SEPTEMBER â MINUTES RTRS-BOE MPC VOTED 8-1 TO KEEP QE AT 200 BLN STG, POSEN VOTED FOR 250 BLN STG http://ftalphaville.ft.com/blog/2011/09/21/682136/uk-qe2-coming-down-the-slipway/ QE II in the UK, QE III in the US and maybe also some liquidity booster from the ECB, too? Ay, thatÂ´s going to be a fun winter time in capital markets - if you adore VOLA - like me.