BoE keeps quantitative easing target unchanged at 325 billion sterling

The Bank of England left its monetary policy unchanged on Thursday, sticking with February's decision to do an extra 50 billion pounds of quantitative easing to support the economy through a period of fitful recovery.

None of the economists polled by Reuters last week had expected the BoE to deviate from the three-month program of gilt purchases announced last month, and the debate is increasingly shifting to whether there will be further QE in May.

In contrast to late last year - when more QE seemed highly likely - February's meeting showed growing divisions on the Monetary Policy Committee, despite the majority vote to raise the QE total by 50 billion pounds to 325 billion. Two MPC members wanted a 75 billion pound increase, while others saw a case for no QE at all.

How the debate panned out this month will not become clear until March 21, when the BoE releases minutes to the two-day MPC meeting.

Britain still faces a sluggish economic recovery and is highly vulnerable to any worsening in the euro zone debt crisis.

Business activity surveys have softened slightly from January's relatively strong readings, and oil prices have surged - a double-edged sword that may push up inflation in the short-term, but weaken medium-term growth.

With inflation still well above target at 3.6 percent, the record high just hit by British petrol prices may make more hawkish policymakers nervous about the central bank's forecast that inflation will be below 2 percent by the end of the year.

March's policy decision marks the third anniversary of the BoE's decision at the depths of the financial crisis in 2009 to cut interest rates to a record-low 0.5 percent and start buying financial market assets with newly created money.

QE has generally enjoyed support from Britain's politicians and public, though there have been concerns that it has hurt pensioners' retirement income. Earlier on Thursday, the National Association of Pension Funds, which said that the 125 billion pounds of QE since October may have cost them 90 billion pounds.

(Reporting by David Milliken)