The Bank of England's rate-setting committee considered pumping an extra £75 billion of new money into the UK financial system to kick-start the economy, minutes from its May meeting revealed today.

The Monetary Policy Committee (MPC) settled on increasing the process of quantitative easing by £50 billion, taking the total to £125 billion, and voted unanimously to keep rates on hold at 0.5 per cent.

But the minutes said: "For some members, the economic outlook warranted an increase in the size of the programme of £50 billion. For other members, a case could be made for the larger stimulus."

This indicates that quantitative easing may be extended again in the coming months. An increase of £75 billion would have resulted in £150 billion of newly printed money being pumped into the system – the maximum amount set out under the Bank’s quantitative easing plan.

Stephen Lewis, economist at Monument Securities, said: "I think it points in the direction of doing more quantitative easing, the fact that the £75 billion option was discussed suggests that when they have their next meeting they will be discussing whether to do another £25 billion."

The Chancellor has given permission for £150 billion in quantitative easing, but the minutes discussed how the Bank could ask permission to print more money.

The minutes also showed that the Bank is concerned about the strength of any recovery, admitting that the steep 1.9 per cent fall in GDP in the first three months of the year was bigger than they had expected.

Howard Archer, chief UK and European economist at IHS Global Insight, said that this, coupled with the lack of any discussion about whether rates should be moved "reinforces belief that interest rates have highly likely troughed at 0.50 per cent but are not going to rise for some considerable time to come."

Yesterday new data revealed that the country dipped deeper into deflation, with the retail prices index measure of inflation falling to -1.2 per cent in April, the lowest level on record. Inflation as measured by the consumer prices index, the Bank's target measure. dropped from 2.9 per cent to 2.3 per cent, but is expected to tumble below 2 per cent in the coming months to near 0 per cent.

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