No change is expected to quantitative easing levels or rates, according to Global Insight following November's GBP 25 bilion extension to GBP 200 billion unless the economy suffers a serious relapse in 2010.
However, any policy tightening clearly remains a long way off given that significant, sustainable recovery remains very far from certain, it said.
The Bank of England's quantitative easing programme is planned to last through to February, but “it is odds-on that the MPC will sit tight this month,” said the analytical firm.
“While it is clear that the MPC were surprised by the further contraction in GDP in the third quarter, the testimonies of MPC members to Parliament's treasury committee in late November - as well as their recent speeches and interviews - indicate that they believe that the UK economy has now turned and improvement will occur from the fourth quarter,” said spokesman Howard Archer.
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