Bank of England policymakers voted 9-0 to keep interest rates at 0.5 per cent earlier this month and to opt against expanding its credit-easing plan, minutes of the meeting showed yesterday.

The BoE's nine-member monetary policy committee (MPC) decided against pumping billions of extra pounds into money markets at the July 8-9 meeting, when it also held interest rates at a record low of 0.5 per cent.

While the July rate decision had been widely expected, many economists had forecast the MPC would create an extra £25 billion under its quantitative easing scheme.

"The committee had not learnt much from developments over the past month that would enable it to assess whether the asset purchase programme would prove more or less effective than it had judged previously," the minutes read.

"There had not been enough clear evidence to suggest that the £125 billion target should be changed at this meeting," they said.

"In the short term therefore, asset purchases would continue over the month ahead as they were still short of the target level of £125 billion."

Under QE - a process seen as effectively printing new money - the British central bank buys government bonds from commercial banks in the hope that the institutions will lend once again to businesses and individuals.

Back in March, the BoE decided to cut its key lending rate from one per cent to 0.5, the lowest level since the central bank was formed in 1694, as recession tightened its grip on the British economy.

The central bank also launched its QE programme in March, when it decided to pump out £75 billion of newly-created money after slashing interest rates, in a twin-pronged attack on the global credit crunch. In May, the BoE decided to create an additional £50 billion.

The minutes said yesterday that the QE plan would be kept under review and would be re-assessed next month in light of the BoE's quarterly forecasts on inflation and economic growth.

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