LONDON (Reuters) - The Bank of England left its asset purchase programme intact at £200 billion ($325 billion) and held interest rates at 0.5 percent yesterday, as widely expected.

Policymakers have indicated they would not shift policy until at least February when they will get their new growth and inflation forecasts and the scheduled asset purchases run out.

Most analysts have concluded there will be no further increase to the scheme as the economy finally appears to be pulling out of the longest recession since World War Two.

"It was the only realistic thing they could have done. The next big decision will be taken in February with the new inflation report," said Brian Hilliard, economist at Societe Generale. "But cracks are already appearing in the committee and I don't think they will expand again."

The BoE launched its quantitative easing — mainly asset-buying of government bonds with newly created money — in March in an unprecedented attempt to boost an economy ravaged by a global credit crunch.

The economy is now showing signs of picking up again, house prices are rising and forward-looking surveys point to an ongoing recovery in activity.

But it still could be a long, hard slog and policymakers have said it will some time before levels of output get back to pre-crisis levels.

Interest rates are therefore likely to remain very low for some time, according to most analysts.

Complicating the picture for the BoE is the outlook for fiscal policy. Britain's budget deficit is expected to near a record 13 percent of GDP in the current fiscal year.

But with an election due in less than six months, neither the Labour government nor the opposition Conservative Party, who are most likely to win, have spelled out exactly how they will bring the deficit down.

Finance minister Alistair Darling announced on Wednesday a tax hike for all but the poorest but that will come in only in 2011 and the consensus is that more will have to be done, probably in the form of savage spending cuts.

The Conservatives, for their part, have said they would bring the deficit down quicker but again with little detail, promising instead an emergency budget within 50 days of being elected.

"We've got to keep interest rates as low as possible for as long as possible," George Osborne, most likely to be finance minister if the Conservatives win the election, told Reuters in an interview earlier on Thursday.

The lack of fiscal clarity and uncertainty over how quantitative easing affects the economy makes for a murky brew for the Bank of England to peer through.