Britain's economy faces a bumpy road to recovery littered with risks and the Bank of England will be guided by the evidence when deciding whether to sanction another round of money creation, its top policymakers said on Wednesday.

In a parliament hearing, Britain's rate-setters stressed the threat to recovery from the euro debt crisis and a lack of bank lending, though governor Mervyn King again rejected calls for the BoE to be more active in boosting credit to smaller firms.

They reiterated the central bank's prediction that the economy should pick-up this year after a tricky start with falling inflation helping to ease the squeeze on Britons' finances. However, deputy governors Paul Tucker and Charles Bean both highlighted the risk that inflation may fall less than forecast.

By and large, I don't think there's any hard and fast expectation that we're inevitably going to do much more, King told parliament's Treasury Committee when asked if the bank may pump yet more new money into the system.

We will take whatever action we think is appropriate and at that point, expectations will adjust.

Earlier this month, the Bank sanctioned a further 50 billion pounds ($79 billion) of asset-buying with new money, known as quantitative easing, taking the total programme to 325 billion pounds since it was started.

Minutes of that policy meeting showed two of the nine members sought a bigger increase, while others considered doing nothing, worried that inflation may turn out higher than the central bank expects.

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The government has little room to stimulate the economy as it aims to erase a huge budget deficit, and King stressed that the country should not get complacent in its deficit fight just because borrowing costs were low.

With fiscal support unlikely, the pressure to boost the economy remains firmly on the central bank.

A string of more upbeat business surveys and signs that consumers are gaining confidence have dampened fears of a renewed recession after the economy contracted at the end of 2011. A surprise jump in mortgage lending and approvals on Wednesday showed that even the sluggish housing market may gain some momentum.

I expect very subdued growth in the first half of the year, followed by a gradual strengthening, reflecting an ease in the squeeze on household incomes as inflation falls, BoE deputy governor Bean said in written testimony to the committee.

Bean told the committee that household spending growth should pick up in the second half of this year but was cautious about more upbeat recent economic data. It will take a lot more swallows to make a summer, he said.

Tucker said the outlook was highly uncertain. Reflecting the risks in both directions, we will need to keep the scope for policy actions under review, he said.

However, both noted the risks to the BoE's inflation forecast, with Bean saying his view was slightly north of the Committee's best collective judgment.

The policymakers said tight credit conditions were hampering the economy, though King reiterated his view that it was for the government to get banks lending more.

Even long-standing QE-advocate Adam Posen said risks to inflation meeting the target over the medium-term were now broadly balanced, indicating that he did not see an urgent need for another dose of stimulus.

In its quarterly inflation report, released two weeks ago, the BoE raised its medium-term inflation forecast to close to its 2 percent goal, indicating that a further dose of quantitative easing may be far from certain.

UK inflation has spent years above the BoE's target but fell to 3.6 percent in January, the lowest in more than a year.

(Reporting by UK bureau, Writing by Sven Egenter and Mike Peacock)