The Bank of England has decided not to extend its quantitative easing programme at the moment but left the door open for future asset buying if needed.

In a statement, the bank's monetary policy committee said: 'The committee will continue to monitor the appropriate scale of the asset purchase programme and further purchases would be made should the outlook warrant them.'

But for now, members believe there are signs the economy is pulling out of recession and more stimulus is not needed.

The statement said: 'On balance, the committee believes that the prospect is for a gradual recovery in the level of activity.' 

In a bid to silence critics over the bank's apparent carefree attitude to rising inflation the committee said today's move was prompted by a desire to keep inflation on track to meet the 2% inflation target over the medium term.

It also said the stock of past purchases, together with the low level of interest rates, will continue to stimulate the economy for some time to come.

The Bank has spent £200 billion buying up assets since its quantitative easing programme - known as the Asset purchase Facility - began last March. It had used up the last of that money by early this week.

Charles Davis, senior economist at the Centre for Economics and Business Research said: 'We expect interest rates and quantitative easing to remain on hold until after the election unless the bond market fears on the continent spill over into the UK.'