Committee members noted “the already severe strains in bank funding markets and financial markets more generally”. But they added that “the worst risks had not so far crystallised”.

It was against that background that the committee voted unanimously against further quantitative easing, on top of the £75bn announced in October. It also voted 9-0 to maintain the bank base rate at 0.5 per cent.

The MPC continues to believe that UK inflation will fall sharply by the end of the first part of next year. However, it noted that as inflation is materially above its target level “it remained a possibility that it would be slower to fall during 2012 than the pace implied by the committee’s projections”.

Chris Williamson, chief economist at Markit, said: “The situation in the eurozone looks set to be the main driver of policy in the UK.”

Nida Ali, economic adviser to the Ernst & Young Item Club, said: “Growth outlook is weak, while inflation is likely to undershoot the 2 per cent target in the medium-term. Additional QE in the coming months is practically a foregone conclusion.”