MPC report hits pound

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The pound all but doubled earlier losses to stand down 1.83 cents at $1.6376 in the minutes after the report was published. It was later down 1.66 cents at $1.6393.

It was only the latest occasion this month the Bank has sent the UK currency into a tailspin.

The City is concerned about the Bank's gloomy outlook for the UK economy, and a lack of evidence that quantitative easing will work.

Critics complain the highly unusual process is being carried out in a "somewhat arbitrary" manner.

The pound tumbled on 6 August when the Bank increased quantitative easing by £50 billion to £175 billion.

It then went into reverse on 12 August when King warned that "recovery could be slow and protracted" in the UK. He also said it was "more likely than not" inflation will fall below 1% this year.

The shock news King wanted to raise quantitative easing to £200 billion then sent sterling lower again today.

"When we see uncertainty creeping into what the Bank's course of action will be, the pound takes a buffeting," said Peter Dixon of Commerzbank.

"It was surprising we had three members looking for £75 billion.

"This clearly suggests the bank is leaving the door open for additional measures, should they feel need for a rise. Quantitative easing is still very much in play," he said.

The Bank is seen as favouring a weak currency because of the positive impact this would have in making exports more competitive, and therefore boosting the wider economy.