The Bank of England (BOE) on Thursday decided to expand its monetary easing program while leaving the borrowing costs steady as it looks to avoid deflation.
The nine-member Monetary Policy Committee said today that the UK central bank would buy an additional £50bn (US$79.2bn) of assets, mostly British government bonds.
With this, the BOE's total stock of purchases comes to more than 20% of Britain’s annual GDP.
In a separate but expected move, the MPC left its key lending rate at a record low 0.5%, where it has stood since March 2009.
The BOE said that the pace of expansion in the UK's main export markets has slowed and concerns remain about the indebtedness and competitiveness of some euro area countries.
"In the light of its most recent economic projections, the committee judged that the weak near-term growth outlook and associated downward pressure from economic slack meant that, without further monetary stimulus, it was more likely than not that inflation would undershoot the 2% target in the medium term," the UK central bank said in a statement.
While the British economy is showing some signs of traction, easing worries of an imminent recession, but growth is expected to remain weak.
The UK consumer price inflation has trended lower to a 4.2% annual pace.
This is still well above the central bank’s 2% target, but the rate is expected to continue its southward journey.