LONDON (Reuters) - The Bank of England left interest rates unchanged at a record low of 0.5 percent for the third month running on Thursday, and said it would continue its 125 billion pound asset-buying program to tackle the recession.

"The Committee expects that the announced program will take another two months to complete," the Bank said in a statement. "The scale of the program will be kept under review."

The Monetary Policy Committee's decision was widely expected, coming a month after the central bank said it would boost the quantitative easing program by 50 billion pounds.

Since then, surveys have suggested the economy, which is on course to shrink by more than 3 percent this year, may be over the worst. The pound has strengthened by around 3.5 percent versus the currencies of Britain's main trading partners over the past month.

House prices jumped 2.6 percent in May, the biggest monthly rise since 2002, according to the Halifax index published earlier on Thursday.

The service sector, which makes up three-quarters of the British economy, also returned to growth in May, purchasing managers' data showed on Wednesday.

But policymakers are likely to remain cautious, and BoE Governor Mervyn King has pointed to the high level of uncertainty surrounding the current outlook.

Most analysts expect the BoE to extend its quantitative easing program by at least another 25 billion pounds, the maximum currently permitted by the government.

If the central bank wanted to do any more than a total of 150 billion pounds, it would have to seek permission from the Treasury, though few believe that would be a problem.

(Reporting by Sumeet Desai; editing by David Stamp)