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Howard Archer, European economist at HIS Global Insight, said the Bank's Inflation Report gave no strong indication whether it was likely to inject further stimulus into the economy. The program of asset purchases, known as quantitative easing, has paused after pumping 325 billion pounds into the economy since March 2009. "We suspect that the Bank of England would prefer not to do more QE, but is prepared to act if underlying economic activity fails to improve," Archer said. King said persistently high inflation, which peaked at 5.2 percent in September, has been caused by higher than expected commodity and energy price. That has squeezed real take-home pay, in turn hitting consumption growth. Credit conditions, meanwhile, remain tight, he said. "The direct and indirect exposures of U.K. banks to the euro-area periphery have affected funding costs," King said.
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