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The move was widely expected after BoE Governor Mervyn King said last month the economic outlook had deteriorated since the BoE called a halt to its second round of asset purchases - also known as quantitative easing - in May.
"Against the background of continuing tight credit conditions and fiscal consolidation, the increased drag from the heightened tensions within the euro area meant that, without additional monetary stimulus, it was more likely than not that inflation would undershoot the target in the medium term," the BoE said in a statement.
The BoE has bought 325 billion pounds of government bonds to date, and the purchases announced on Thursday take this total to 375 billion. They will be spread over four months - longer than many economists expected, and a minority had expected the BoE to conduct 75 billion pounds of purchases.
Gilt futures - which had rallied in the run-up to the decision - fell by more than 30 ticks to hit a session low after the data. Sterling rose versus the dollar.
"The Bank of England has chosen to give the ailing UK economy a further shot in the arm, adding to its asset purchases in the light of recent disappointing economic data and a gloomier-looking economic outlook," said Chris Williamson, an economist at financial data company Markit.
Although Greek elections last month avoided a worst-case outcome of a government vehemently opposed to the country's bailout, the euro zone debt crisis continues to fester and is increasingly weighing on the global economy.
The European Central Bank is widely expected to cut interest rates when it announces its policy decision at 1145 GMT, although the BoE kept its interest rate on hold at 0.5 percent, where it has been since March 2009.
Britain's economy has been in recession according to official data since late last year, and private-sector data is also showing a slowdown.
Inflation has fallen more than expected to 2.8 percent, easing some of the concerns that caused the BoE to halt stimulus in May, though it is still well above its 2 percent target.
The QE stimulus follows joint measures announced by the government and BoE last month to improve the flow of credit to businesses, and to ensure banks do not suffer from a lack of ready cash if the euro zone crisis deepens.
"Taken together with reduced pressure on household real incomes, on the back of lower commodity prices, and the continued stimulus from past monetary policy actions, that should sustain a gradual strengthening of output growth," the BoE said.
The BoE says its purchases of government bonds help the economy by encouraging other investors to buy riskier assets instead, making it easier for large companies to raise funds through bond or share issues. Critics argue the BoE needs to do more to boost the flow of credit to smaller companies.
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