THE Bank of England has held off again from providing further monetary stimulus to the struggling UK economy.

Its Monetary Policy Committee voted yesterday to hold UK base rates at their record low of 0.5% and maintain the scale of its quantitative easing programme at £375 billion, in what is likely to have been another split decision.

QE is aimed at stimulating activity by boosting money supply through the purchase of Government and corporate bonds, using central bank reserves.

Stephen Boyle, head of group economics at Royal Bank of Scotland, said: "Not enough has changed in the domestic economy over the past month for the MPC to hit the stimulus button."

He believed MPC members would be "sleeping a little easier" following a survey from the Chartered Institute of Purchasing and Supply showing growth in the UK's services sector in March.

However, he added: "The eurozone's recent flare-up will be a worry, given its potential to undermine sentiment and the UK's export prospects."

The recent bail-out of Cyprus fuelled worries over the broader eurozone situation.

John McNeill, head of international rates at Edinburgh-based fund manager Kames Capital, said: "With inflation remaining stubbornly above target, a majority of the committee clearly believe that a further easing of monetary policy is not warranted at this time despite the stagnant outlook for the economy."