Policymakers of the Bank of England is set to adopt a "wait and see" stance at the start of the year as policymakers see little compelling case for another stimulus.

The Monetary Policy Committee headed by Mervyn King is expected to keep the size of its bond buying program unchanged at GBP 375 billion and the interest rates unchanged at record low 0.50 percent on Thursday. The announcement is due at 7.00 am ET.

The previous increase in the size of the central's bank's QE program was in July. At the December meeting, David Miles sought a GBP 25 billion increase in QE, saying that the case for undertaking additional asset purchases was strong.

At the same time, the other members of the MPC said the immediate risks emanating from the euro area seemed less pressing than they had in the summer and that the early signs of the Funding for Lending scheme were encouraging.

IHS Global Insight Chief UK economist Howard Archer is of the view that the bank will eventually give the economy a further helping hand with a final GBP 50 billion of QE during the first half of 2013.

Exiting recession in the third quarter, the economy expanded 0.9 percent following a 0.4 percent contraction in the second quarter.

Meanwhile, the service sector shrank in December due to a fall in incoming new orders, the Purchasing Managers survey showed.

The British Retail Consortium reported a very moderate 0.3 percent growth in retail sales in December as the Christmas trading period failed to give the much-awaited boost to consumer spending.

The British Chambers of Commerce said this week the British economy will see modest growth in the next two years notwithstanding the major challenges.

Citing risks emanating from weak economic growth and rising general government debt, Standard and Poor's downgraded its outlook on Britain's 'AAA' rating to 'negative'. Now the nation faces one-in-three chance of losing its top rating within the next two years.

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