Bank of England rate-setters could pump as much as £50 billion extra into the economy

Bank of England rate-setters could pump as much as £50 billion extra into the economy this week as the UK wallows in recession.

Many experts expect its quantitative easing (QE) programme to be hiked in the wake of figures showing a shock fall in UK output between July and September, with interest rates held at their 0.5% record low.

The 0.4% third-quarter decline stunned markets expecting a technical end to recession and represents a record sixth straight quarter of economic contraction.

It also added to the political pressure on Gordon Brown as the US - the world's largest economy - joined major countries such as France and Germany in emerging from recession, leaving the UK lagging behind.

Uncertainty over the impact of QE also grew last week after the latest figures showed a 0.9% decline in the Bank's preferred measure of money growth last month.

Vicky Redwood of Capital Economics said: "With QE failing to give a big enough boost to the money supply and the recession deeper than the MPC expected, the committee is highly likely to extend its programme of asset purchases further at next week's meeting. We expect another £50 billion to be announced."

The Monetary Policy Committee (MPC), which is charged with keeping Consumer Prices Index inflation at 2%, will have access to the Bank's latest economic forecasts when making its decision.

But some members - including Bank of England Governor Mervyn King - were calling for an expansion of the programme three months ago amid fears over the economy but were voted down by the wider committee.

Barclays Capital economist Simon Hayes said Thursday's decision would be a "close call" but also favours a £50 billion expansion of QE.

If this happens any rate hikes could be pushed back to the second half of the year, he predicts.