Meanwhile, euro zone leaders have reached an impasse and have begun pointing fingers instead of forging a path to solvency.
Britain, already in the throes of its second recession since 2008, has sunk a bit deeper into the European economic quagmire, according to a Reuters report
. Britain's economy contracted by 0.3 percent between January and March, according to the Office for National Statistics, confounding forecasts for an unchanged reading of -0.2 percent. On the year, GDP shrank by 0.1 percent, the first annual decline since the fourth quarter of 2009.
The BoE's Monetary Policy Committee (MPC) paused its asset-buying quantitative easing program at 325 billion pounds this month and appears ready to pump more money into the economy as talks of a break-up of the currency union intensify.
"The economy is not recovering properly and with the uncertainty over Europe hanging over the outlook as well, our suspicion is the MPC will sanction further QE at some point later on this year," said Philip Shaw, economist at Investec.
The economic indicators spell trouble for British finance minister George Osborne, who is pushing harsh austerity measures to curb Britain's mounting debts. Osborne opponents claim spending cuts will stymie a recovery while proponents say boosting jobs through private enterprise is the path to economic solvency.
Britain's economy has expanded a mere 0.3 percent since the Conservative/Liberal Democrat government came to power in 2010. While Thursday's figures show government spending recently made the biggest positive contribution to the economy, analysts say spending is a crutch, not a solution to the country’s economic woes.