The Bank of England inched towards pumping more money into the faltering economy in January as the risks from the global economy still loomed large, minutes to the Bank's January 11-12 meeting showed on Wednesday.

The central bank's minutes repeated the view that inflation was set to fall sharply in the coming months, though tensions in the Middle East carried the risk of a sharp rise in oil prices.

The 9-member monetary policy committee also noted that some positive developments moderated some of the most serious risks, pointing to the European Central Bank's generous provision of long-term liquidity.

The MPC voted unanimously to hold the target for asset purchases steady at 275 billion pounds and the key interest rate at the record-low of 0.5 percent, where it has been since March 2009.

For some members, the risks of undershooting the (inflation) target meant that a further expansion of asset purchases was likely to be required, the minutes said in a slightly more assertive tone than last month.

Britain's economy has been moving closer to recession over the past few months though some less downbeat business surveys and retailers' strong Christmas sales raised hopes that the country may avoid another slump.

The Bank reiterated the view that output was likely to be broadly stagnant in the final quarter of 2011 and the first three months of 2012.

Most economists expect the central bank to announce another 50 billion pounds cash injection for the economy in February as the government's hands are tied by its pledge to erase the country's huge budget deficit over the next five years.

Bank governor Mervyn King said in his first key note speech of the year that falling inflation is providing the scope for further quantitative asset purchases if necessary.

The policymakers judged that there was no compelling reason to think that the impact of the current bout of quantitative easing would be materially different from the first round, the minutes showed.

The minutes reiterated the Bank's forecast that inflation would fall sharply in the near-term as one-off effects such as last year's increase in sales tax fell away, though the policymakers also noted the uncertainty in the medium-term.

There was greater uncertainty about the speed and extent of the fall in inflation thereafter, the minutes said.

Some members continued to argue that risks to inflation were overall more finely balanced and it was less clear that it would fall below the target in the medium term.

In particular Bank chief economist Spencer Dale has indicated that he would want to see clearer signs that inflation was coming down as expected before voting for further asset purchases.

Inflation has eased to 4.2 percent in December, down from the three-year high of 5.2 percent hit in September, though still more than twice the central bank's target.

The Bank forecast inflation to fall below 2 percent towards the end of this year. The Britain's large utility companies announced to cut gas and energy prices over the past couple of weeks.