All nine members of the Bank of England's Monetary Policy Committee voted to keep interest rates at a record low of 0.5 percent and maintain the 200 billion pound asset buying programme in December, as expected. Analysts do not expect any further expansion of the BoE's quantitative easing scheme - pumping money into the economy by buying assets - and are now looking for an indication of when the central bank might start to tighten monetary policy.
Britain is showing signs of recovery after a year and a half of recession and, although it is lagging behind other economies, policymakers expect a return to growth before the year is out. Minutes of the BoE's December 9-10 meeting, published on Wednesday, showed the MPC felt little had changed since November when they expanded quantitative easing, mostly targeted at buying British government bonds, by 25 billion pounds.
"While it seems likely that the MPC is nearing the end of its measures to support the economy, further action is certainly possible if the recovery disappoints," said Jonathan Loynes, an economist at Capital Economics. "There were exceptional uncertainties over the outlook for inflation and activity growth which would only be resolved over time," the minutes said. The November decision to increase QE had been split, with Chief Economist Spencer Dale favouring no expansion and external member David Miles wanting a 40 billion pound boost.