In addition, the MPC decided to hold interest rates at 0.5% for the eleventh consecutive month, meaning the UK will have spent an entire year with the historic low interest rate when the committee next meets in March.

Both decisions were widely anticipated by analysts, as the UK's sluggish return to growth in the fourth quarter of 2009 put the fragile economic recovery ahead of inflationary fears, despite CPI inflation recording its largest ever jump, to 2.9%, in January.

In usual economic circumstances the MPC would raise interest rates to combat rising inflation, however, the fragility of the UK's return to growth - registering just 0.1% in Q4 2009 - has raised fears of a "double dip" recession and made any increase in interest rates very difficult to justify.

BoE governor Mervyn King has warned that inflation could rise over 3% for "a while" but that it "should return to target in the medium term". This view was echoed by the MPC, which said that its decision to hold interest rates at 0.5% and QE at £200bn was intended to "meet the 2% inflation target over the medium term".