The Bank of England has kept interest rates at 0.5%, and also held off on a further round of quantitative easing (QE) despite indications that the economy is teetering on the brink of recession.
The bank announced a £75bn extension to its "asset purchase programme" - printing money to buy up UK bonds and free up capital for the real economy - back in October. It is widely expected to further increase the programme in 2012 as credit continues to be scarce and the economy remains fragile.
“Today’s decision by the [Monetary Policy Committee] to leave monetary policy unchanged was expected, since the current round of asset purchases is not yet complete," Confederation of British Industries chief economic adviser Ian McCafferty said in an emailed statement.
“But with economic conditions fragile and inflation expected to undershoot, the MPC appears to be signalling that a further extension of the asset purchase programme is likely in the months ahead.”
The Organisation for Economic Cooperation and Development (OECD) issued its "leading indicators" - a measure of the direction of travel of its member economies. The UK's leading indicator fell for the ninth successive month, heightening fears that the economy might be heading back into recession.
The figure, and the bank's meeting, came after a very bleak few days news, which was brightened only briefly by slump-beating results from Sainsbury's and Morrisons, although a profit warning from the UK's biggest grocer, Tesco, on Thursday took that little bit of gloss off.
Weak retail sales indicate tough consumer conditions, which is a worrying sign for an economy that is heavily weighted towards domestic consumption.
Poor industrial production figures and falling exports added to fears of a contraction.
Falling inflation might deliver some respite to the battered high street, freeing up some money for consumers to spend. However, it will be difficult to turn sentiment around as the eurozone's woes continue to dominate headlines.
If inflation does, as expected, fall back from its peak of more than 5% in September 2011 to a more moderate 2-3% in 2012, it would give the central bank some more leeway to introduce further quantitative easing - i.e. print more money - in order to stimulate the economy.
The consensus amongst analysts is that the bank will indicate an expansion of its asset purchase programme in February, with £50bn in additional bond buying - taking the total amount to £375bn - likely to be announced.
Graeme Leach, the chief economist at the Institute of Directors, said in an email that maintaining the status quo for now was "the right decision" as the bank needed to see more evidence of how the last round of QE was working and how the economy had performed during the festive season.
However, with continuing problems in Europe overshadowing the domestic agenda, he anticipates more intervention.
"We think the euro crisis could yet get a whole lot worse and so we still expect a substantial increase in quantitative easing by the Bank of England this year,” he said.