The Bank of England held back from unleashing further emergency support for the economy today, despite receiving a jolt over the health of the UK's recovery.

The Bank's Monetary Policy Committee maintained interest rates at record lows of 0.5% and held its quantitative easing (QE) programme at 375 billion as it continues to work through 50 billion of asset purchases announced in July. QE is effectively the printing of cash.

The move comes after positive manufacturing and services surveys revealed tentative signs of a recovery, but this optimism was dampened after the Organisation for Economic Co-operation and Development slashed its growth forecast for 2012.

The think-tank expects the UK will not pull out of its double-dip recession in this quarter, which will see the economy shrink by 0.7% over the previous year, compared to previous expectations of a 0.5% decline.

Most economists predict a further QE boost in November, after the current run of asset purchases is completed, while some believe a rate cut is on the cards.

Anna Leach, CBI head of economic analysis, says: "We would need only a relatively small deterioration in economic conditions to prompt a further extension of the asset purchase programme later this year."

On Our Forums

Base rate unchanged