It is now public knowledge that Sir Mervyn King was over ruled during the last quarter of 2012 when he voted for more QE [quantitative easing].
The pound fell sharply as the markets reacted in shock to minutes from this month’s Monetary Policy Committee (MPC) meeting, which revealed that three members voted to increase QE by £25bn to £400bn – including Sir Mervyn King. Last month, only David Miles wanted to restart the printing presses.
Sir Mervyn King has said in the past that the bank would tolerate inflation riding above the previous 2% agreed limit since the 2008 economic explosion, however markets expected QE to continue.
The pound has been suffering lately anyway and this is going to be bad news for arbitration.