Monetary Policy Committee members would have to see a substantial weakening in medium-term inflation pressures before contemplating further QE according to the investment bank.
This would require a severe deterioration in the UK growth outlook to the extent that the UK was facing a double-dip.
MPC member Adam Posen, has consistently voted for an extra £50bn of QE, while Martin Weale, another MPC member, delivered a speech on 25 August at a lunch hosted by the Doncaster Chamber of Commerce declaring such an action was not needed.
Weale said: “I do not think our August forecast or the more recent market movements since then as yet make a case for such a policy.”
The greatest downside risk to growth comes from abroad.
In Morgan Stanley’s view, a significant escalation of the eurozone crisis could, through several different channels, threaten to push the UK back into recession.
QE may however fail to significantly boost growth if employed.
The investment bank said: “Current low yields mean that, even at the long end of the curve, the BoE may struggle to push rates meaningfully lower, particularly if the UK is viewed as a safe haven.”
Weale suggested that directing QE at the long end may fail to significantly boost growth because unlike the US, UK mortgages are typically based on the short end of the yield curve.
