The Bank's Monetary Policy Committee said the economy is expected to avoid another recession, but unemployment is likely to rise as government support schemes end.
David Ross, managing director of Hometrack, commented: "While there are some negative economic headwinds it's encouraging to see the Bank of England maintain this historically low interest rate".
"Britain's economy has been propped up by BoE bond-buying alongside a surge in government spending that will explode the budget deficit to around 20% of gross domestic product in 2020", Reuters said.
"An extraordinary economic shock warrants an extraordinary policy response", said Ambrose Crofton, global market strategist at J.P. Morgan Asset Management.
The increase in the bond-buying program was bigger than the 100 billion pounds anticipated in financial markets and is aimed at keeping borrowing rates low to boost lending and ensuring that money keeps flowing through the financial system.
Some officials are anxious they might damage Britain's banks just when they are needed to keep on lending.
The broad dollar's weakness pushed GBP/USD to 1.3148 a fresh weekly high, with the pound finding support also in the BOE.
The BoE cut its forecasts for Britain's economy which it now expects to only exceed its size before the COVID-19 pandemic in the first quarter of 2022.
In August, before the second wave of COVID-19 cases swept Europe, the BoE projected that process might be complete by the end of next year.
GDP was then set to rebound by 7.25% next year - but this was also down from the 9% increase given previously.
"Our view is that inflation will be closer to 1.5 per cent by the end of 2022".
"We think that there will again be many millions of employees placed on furlough.in November, and over the following few months", Broadbent said in a presentation organised by regional agents of the central bank. It was no doubt also concerned about the cost of the program, which has reached 40 billion pounds. Chancellor of the Exchequer Rishi Sunak will address Parliament on the government's support for businesses and households later on Thursday.
Despite the spending, Britain faces the worst peak-to-trough contraction of any Group of 20 economy, Moody's said on October 16 when it cut Britain's credit rating. On Wednesday evening, Michel Barnier, the European Union negotiator at Brexit talks, said that "very serious differences" still existed in trade talks with Britain.
So far, London and Brussels have failed to strike a new agreement.
The bank's monetary policy committee voted "for the Bank of England to increase the target stock of purchased United Kingdom government bonds by an additional £150 billion, financed by the issuance of central bank reserves", it said in a statement.
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