The Bank of England's Monetary Policy Committee (MPC) voted Thursday to hold interest rates at 0.5 percent, while increasing the size of its asset-purchase program, in line with expectations.
The MPC said that the bank would boost its existing £275 billion ($436 billion) quantitative-easing program by £50 billion, bringing the total size to £325 billion.
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Analysts at Barclays Capital said the central bank's November inflation report left policymakers with little alternative to increasing bond purchases.
"The report showed that without further policy stimulus the MPC expected inflation to undershoot the two percent target by 50-75 basis points in the medium term," London analysts wrote in a note to clients.
Equities held on to minor gains in London after the announcement, with the FTSE 100 stock index increasing 0.3 percent.
The British pound moved slightly higher against the dollar, up 0.2 percent to $1.5852.