King holds firm on stimulus - for now

The Bank of England has decided not to extend its stimulus programme.

The meeting of its monetary policy committee (MPC) was likely to have been a close call, economists said, but the majority of rate and policy setters agreed the parameters of its quantitative easing (QE) scheme should remain unchanged.

'The MPC’s decision to leave policy on hold today would not have been an easy one and the vote could have been quite close,' Capital Economics reacted.

Although the UK moved out of recession when GDP data was last published by the Office for National Statistics, the economy was given a boost by the Olympics, which were held over the summer.

The effect of the 2012 Games is likely to prove transient, and follow-up publications by the ONS highlighted key areas of weakness, which could justify more stimulus further down the line.

'We think that more policy stimulus will be required in the coming months – the question is whether the committee feels it has the tools to deliver it,' the consultancy argued.

But Mervyn King (pictured), the governor of the Bank of England, previously said he and the MPC would only give additional stimulus the green light if there was a clear benefit to the economy.