FURTHER monetary stimulus for the recession-hit UK economy looks ever-more likely after it emerged that the vote of several Bank of England policy-makers to hold quantitative easing at £325 billion two weeks ago was "finely balanced".

This much closer call than had been anticipated on whether or not to increase QE was revealed yesterday with publication of minutes of the Bank's meeting on May 9 and 10.

These minutes revealed another eight-to-one vote to hold QE, which is aimed at stimulating economic activity by boosting money supply through the purchase of Government and corporate bonds using central bank reserves. David Miles voted again in isolation for an immediate £25bn rise in QE to £350bn.

Signalling the nine-strong MPC is open to further QE as the UK struggles and the eurozone crisis rumbles on, the minutes state: "For several members, the decision not to expand the asset purchase programme at this meeting was finely balanced. The committee would continue to monitor the outlook each month and further monetary stimulus could be added if the outlook warranted it."

The minutes note that, for Mr Miles, "the balance of risks already warranted a further expansion of the asset purchase programme this month".

Experts including pension consultant Hymans Robertson have highlighted the depressing impact of QE on bond yields, which are used to price annuities, arguing such stimulus is bad news for those looking to buy an annuity as they approach retirement. Some have also cited a detrimental impact on corporate pension scheme deficits.

In a speech yesterday to the National Association of Pension Funds, Bank of England deputy governor and MPC member Charlie Bean flagged scope to increase QE further if required.

He said: "If conditions do deteriorate significantly, we may need to re-start the programme of purchases."

He also said lack of confidence was a major factor holding back the UK's economic recovery.

UK gross domestic product dropped by 0.2% in the first quarter of 2012, figures revealed last month, having fallen by 0.3% in the final three months of 2011. These two consecutive quarters of contraction mean the UK is back in recession. The 17-nation eurozone as a whole avoided renewed recession, with its GDP in the first three months of this year unchanged from that in the final quarter of 2011.

The IMF on Tuesday advised further monetary stimulus from the MPC. It even suggested a cut in UK base rates from their record low of 0.5%, where they have been since March 2009.

However, the MPC has in the past questioned the merits of reducing rates further from a level which is considered in most practical respects to be "near zero" in any case.

UK business and consumer confidence has fallen sharply since the Coalition Government ramped up austerity in the summer of 2010 by increasing annual public spending cuts and tax hikes to be achieved by 2014/15 by £40bn to £113bn.

The IMF on Tuesday highlighted weak consumer and business confidence in the UK.

And IMF managing director Christine Lagarde said at a press conference in London: "If the economy fails to strengthen, fiscal easing should be considered. The measures would have to focus on supporting growth and encouraging employment. A delay in fiscal consolidation in these circumstances would be a good use of the hard-won credibility of fiscal policy and institutions in the United Kingdom."

The IMF said of the UK: "Output remains more than 4% below its pre-crisis peak. Encouragingly, labour market performance has been better, with falling unemployment in recent months and fewer employment losses than in the aftermath of previous major UK recessions - But unemployment at 8.2%, with a large number of youth without a job, is still much too high."