The Bank of England (BoE) says it would increase its Quantitative Easing stimulus policy by STG50 billion ($A76.39 billion) to boost Britain's recession-hit economy.
The BoE said on Thursday it was also keeping its main interest rate at a record low 0.50 per cent following a two-day monetary policy meeting.
"The Bank of England's Monetary Policy Committee today voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5 per cent.
"The Committee also voted to increase the size of its asset purchase program, financed by the issuance of central bank reserves, by STG50 billion to a total of STG375 billion," the central bank said in a statement.
Later on Thursday, the European Central Bank was expected to cut it main lending rate from its current record-low 1.0 per cent.
"UK output has barely grown for a year and a half and is estimated to have fallen in both of the past two quarters," the BoE said in its statement.
"The pace of expansion in most of the United Kingdom's main export markets also appears to have slowed. Business indicators point to a continuation of that weakness in the near term, both at home and abroad."
The Bank of England added that "concerns remain about the indebtedness and competitiveness of several euro-area economies, and that is weighing on confidence here" in Britain.
Though not a member of the eurozone, Britain relies heavily on the area for the day-to-day trading of its goods and services.
The Monetary Policy Committee had pumped up the economy with STG325 billion under its QE stimulus policy since March 2009, when it also slashed its key rate to its all-time low level.
Under QE, the BoE creates new cash to purchase assets such as government and corporate bonds with the aim of boosting lending and economic output.
Britain's recession is meanwhile deeper than initially thought after data last week showed the economy shrank 0.3 per cent in the first quarter after a higher-than-expected 0.4-per cent contraction in late 2011. A recession is defined as two quarters running of contraction.
Despite QE, Britain's main banks have been reluctant to lend to businesses and individuals as they seek to repair their balance sheets, forcing the BoE to take more direct action.
The BoE last month loaned banks STG5.0 billion in the first use of a facility to shield Britain's financial system from the eurozone debt crisis.
The BoE allotted the full amount on offer for six-month loans with an interest rate of 0.75 per cent, under the central bank's Extended Collateral Term Repo Facility (ECTR).
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