The Bank of England’s monetary policy committee voted unanimously on halving the base rate and starting quantitative easing to boost a deteriorating economy.

During the committee’s two-day meeting at the beginning of March, the group discussed the worsening state of the economy, including the still-falling house market and the plunge in equities on the FTSE.

Although the decision to reduce the base rate again to 0.5 per cent was unanimous, the committee had its doubts over the action.

“Some arguments were identified for making no further rate reductions,” the MPC said in its minutes.

“Deposit rates could not be reduced much further, and if these institutions were contractually obliged to pass on cuts in Bank Rate to some of their borrowers, that would squeeze their profits further, and potentially reduce lending capacity.”

However, lower interest rates “should increase the effectiveness of the further measures” the Bank said, while lower returns on deposits held in banks may encourage investors to hold other assets.

All members also voted to start increasing the supply of money through quantitative easing, and agreed £75 billion would be enough to start with, although there were arguments for a higher initial amount.

Vicky Redwood, UK economist at Capital Economics, said the MPC minutes point to no more interest rate cuts.

“The minutes also suggest that the first round of quantitative easing just announced may not be the last,” she said.

“Note that the awful labour market figures also released this morning showed a whopping 138,000 rise in the claimant count in February and the wider ILO measure passing the two million mark as expected. Overall, then, more quantitative easing could yet be to come.”