Bank of England policymakers said the chances of a worst-case outcome for the euro zone c risis had increased over the past month, but that now was not the time to increase monetary stimulus further.
All nine members of the Monetary Policy Committee backed maintaining their target level of quantitative easing asset purchases at 275 billion pounds after October's unexpected 75 billion pound increase, minutes to their November 9-10 meeting showed on Wednesday.
Policymakers were split on the likelihood of a further increase when these purchases are completed by the time of February's MPC meeting.
Some members noted that the balance of risks to inflation in the November Inflation Report projections meant that a further expansion of the asset purchase programme might well be come warranted in due course, the minutes said. Some other members judged that the risks to inflation around the target were more balanced.
The risks of a worst-case scenario for the euro zone's debt crisis had risen since the decision to restart the Bank's QE programme in October, the minutes said.
While the worst risks had not so far crystallised, the threat of their doing so had increased, exacerbating the already severe strains in bank funding markets and financial market s more generally, the minutes said.
But increasing QE now was not the answer. The MPC said the market could not tolerate a substantially faster pace of gilt purchases than the Babk was currently undertaking, and that there was little merit in fine-tuning due to the scale of medium-term economic uncertainty.
Some economists saw a chance that a handful of policymakers might have voted in favour of raising the target for ass et purchases this month. Last month, when the Bank voted unanimously for a restart of QE, some MPC members had considered injecting even more than the 75 billion pounds agreed.
Official data last week showed that consumer price inflation eased in October for the first time since June, lending support to the Bank's expectation that inflation will hit its 2 percent target by the end of next year.
Moreover, in its latest inflation report the central bank paved the way for another cash boost to shore up the struggling economy, saying that the euro zone crisis had forced it to slash its growth and inflation forecasts.
Bank Governor Mervyn King said conditions had deteriorated since August and that Britain's economy could stagnate until the middle of next year.
The minutes gave a similarly downbeat outlook. Third-quarter growth of 0.5 percent overstated the strength of the economy, and early indicators were pointing to stagnation in the fourth quarter, though not to a material contraction, they said.
Economists saw the gloomy inflation report predictions as a clear sign that more quantitative easing was on the cards, especially as the government's hands are tie d by its pledge to erase a large budget deficit.
(Reporting by David Milliken and Olesya Dmitracova)