LONDON (Reuters) - The Bank of England left interest rates at a record low of 0.5 percent for the sixth month running yesterday and stuck with its programme of asset purchases to steer the economy towards recovery.

Most analysts had predicted the status quo after last month's shock decision to raise the amount of money the BoE is printing to support the economy — quantitative easing — by £50 billion pounds to £175 billion.

But sterling gained and front month short sterling futures pared gains because some strategists had priced in an outside chance it would do more to stimulate an economy battered by its worst recession in decades.

The BoE's willingness to keep its foot on the monetary accelerator at a time of growing recovery optimism has set it apart from other central banks. The Bank of Korea signalled yesterday that it could raise rates in the next few months and Australia, which narrowly avoided recession, is expected to hike before the end of the year.

Governor Mervyn King and two other policymakers had actually wanted to raise Britain's quantitative easing target to £200 billion last month and analysts said the Monetary Policy Committee might have been split again.

Few analysts expect British interest rates to rise before the middle of next year and a further boost to QE remains a possibility when the current £175 billion runs out in two months. The BoE said the scale of the programme would be kept under review.

"A key factor as to whether or not QE is further extended will be whether or not there are growing signs that bank lending is picking up as this is vital to growth," said Howard Archer, chief UK economist at Global Insight.

"What is much clearer is that interest rates will remain at 0.5 percent for some considerable time to come. Indeed, we do not expect any rises in interest rates until at least the latter months of 2010."

Some analysts had speculated the BoE could cut the interest rates it pay banks holding reserves with it, to encourage them to lend to the private sector rather than park their money at the central bank.

"They haven't ruled it out but they haven't talked about it either," said Jonathan Loynes of Capital Economist. "If they need to do more, the first step would be to extend QE."