The Bank of England opted against stepping up its program of government bond purchases on Thursday as the economy is showing some signs of growth and new schemes to boost credit may yet spur fresh lending.
Britain is expected to have exited recession in the third quarter as output bounced back from the effect of an extra public holiday in June and ticket sales for the London Olympics boosted growth.
Some of the nine monetary policy makers are also confident their new Funding for Lending Scheme aimed at getting credit flowing through the economy will help support the recovery.
Still, another cash injection later this year remains a safe bet in the eyes of many economists because the recovery looks feeble, government spending cuts continue to weigh, and the dangers from the unresolved euro zone crisis loom large.
The Monetary Policy Committee made no change to its current plan to buy £50-billion ($81-billion U.S.) of British government bonds, which will take its total purchases to £375-billion by November.
It also left its interest rate unchanged at a record-low 0.5 per cent, in line with a Reuters poll of economists, who had bet on unchanged policy.
A slew of weak business surveys have highlighted the fragility of the latest recovery, and the scheme to get credit flowing has yet to prove its worth.
The two days of discussions may have been lively, however. Minutes of the September meeting revealed that one rate-setter – BoE watchers suspect David Miles – saw a "good case" for a higher dose of stimulus.
BoE chief economist Spencer Dale and external MPC member Ben Broadbent, meanwhile, have indicated some reluctance to vote for more quantitative easing, voicing concerns about the inflation outlook and pinning their hopes on the new lending scheme.
The central bank will release the minutes of the meeting on Oct. 17.
New growth and inflation forecasts in November's quarterly inflation report will help policy makers decide whether more economic stimulus is needed.
The BoE rate-setters will also watch closely if the European Central Bank's pledge to buy Spanish and Italian government bonds to calm the euro zone turmoil will help stabilize Britain's largest export market and the banking industry.