UK economy gets another £50bn boost from the Bank

The monetary policy committee's widely expected decision to expand quantitative easing brings the amount printed by the Bank to £325 billion since it embarked on the unprecedented policy in March 2009.

Interest rates were also held at their record low 0.5% as the MPC moved to combat double-dip fears.

The Bank said: "Some recent business surveys have painted a more positive picture and asset prices have risen. But the pace of expansion in the United Kingdom's main export markets has also slowed and concerns remain about the indebtedness and competitiveness of some euro-area countries.

"The drag from tight credit conditions and the fiscal consolidation together present a headwind.

The correspondingly weak outlook for near-term output growth means that a significant margin of economic slack is likely to persist."

The move on QE came despite a backdrop of better recent news on the recovery, particularly since the turn of the year.

Manufacturers bounced back strongly in December, managing 1% growth during the month, and the UK's trade deficit shrank to an eight-year low. Upbeat surveys - particularly from the UK's dominant services firms - have fuelled hopes that the nation will avoid a technical double dip.

But the Bank still believes the UK is in the danger zone after shrinking 0.2% in the final quarter of 2011. The independent Office for Budget Responsibility reckons the economy will manage growth of just 0.7% this year.

The decision also comes as Europe's debt crisis threatens to tip the continent into recession, and Greece is dragging its heels over a 130 billion
(£109 billion) bailout needed to avoid default.

The Bank, believes that the crisis poses the biggest systemic risk to the financial system.

As recently as last July, two members of the monetary policy committee, Spencer Dale and Martin Weale, voted for interest rate hikes to bring down inflation, which at 4.2%, is still more than double the Bank's 2% target.

More QE will also raise alarm among the hawks over the impact on prices, but both Dale and Weale backed away from their stance in October in a victory for arch-dove Adam Posen as the Bank stepped up its response to the eurozone crisis.