The Bank of England left interest rates at 0.5 per cent today and kept the option of more quantitative easing up its sleeve should the economy weaken further.

The Bank of England issued no statement with its decision, but minutes from the meeting are likely to show a heated discussion about what tools could be used if the recovery fails to pick up.

Britain's economy barely grew in the second quarter following six months of stagnation, and data from the United States and the euro zone suggests a global slowdown is becoming entrenched. Even inflation, currently more than twice the BoE's target, appears to be peaking.

UK interest rates have stood at 0.5 per cent for more than two years - already the longest period of inertia since World War Two - and money markets are not pricing in any realistic chance of a rate rise until the second half of 2012.

The BoE has not bought any assets under its quantitative easing programme since February 2010, a time when the economy was picking up after a deep recession.

Reuters