The move was expected - as was the Bank's decision to leave its bond program at £200bn.
The pound extended its decline against the dollar immediately after the decision before regaining ground. It traded at $1.6042 as of 12:02 p.m. in London.
Minutes of today’s decision will be published on February 23 and will show whether any of the other seven panel members joined a push by Andrew Sentance and Martin Weale to increase rates today.
Barry Naisbitt, chief economist at Santander UK, said: “The surprise news last month was that two Monetary Policy Committee (MPC) members voted to raise rates. This combined with concerns that inflation is going to increase further to make the February MPC decision more uncertain than for a long time. While the MPC again voted for no change in Bank Rate today, it may have been by a narrower margin than last month. We’ll know the voting outcome and the views behind it in a couple of weeks.
“In the meantime, financial markets will turn their attention to the quarterly inflation report and in particular the projections for inflation and growth. Since the last report we have had the unexpected 0.5% fall in GDP in the final quarter of last year and the more positive survey readings for January.
"There will be a considerable focus on how the Bank views these, whether it expects inflation to be higher this year than it did a few months ago, and how it judges the risks in the current economic situation.”
And Ben Thompson, managing director at Legal & General Mortgage Club, said: "Base Rate has now been flat since March 2009. In terms of the housing market that quarter saw a drop of 74% in housing transactions from the peak levels of 2006, and at that time the housing market was in complete meltdown.
"Since then transaction levels have recovered well however remain around half the levels of 2006. The recovery in this sector is underway but remains fragile compared to the more robust and perhaps confident recent past. Although for the MPC the monthly meetings are becoming tougher, we remain unsurprised that they have stuck at 0.5% for the timebeing."
Richard Barker, mortgage manager at N&P, added: “The decision to leave the Base Rate unchanged at 0.50% for the 23rd consecutive month does not come as a huge surprise. Whilst concerns around inflation persist, the economy still remains in a relatively fragile state and the members of the MPC are clearly worried that any increase could snuff out the economic recovery.
“While the Government's austerity measures, due to be implemented over the coming months, could help mitigate some of the inflation risk, the MPC members seem to have taken this into consideration and are holding back for the moment. This news will be welcomed by the many borrowers benefiting from historically low variable rates.”
And Ian Long, managing director of St Trinity Asset Management, said: “The sharp – and welcome – fall in repossessions has been driven by historically low interest rates throughout 2010.
"The MPC’s cautious policy has kept thousands of homeowners’ mortgage payments artificially low, cushioning the effects of increasing inflation and the change in many borrowers’ financial situations since the recession.
"Today’s decision to hold rates will provide a further stay of execution for many households, allowing thousands to get their finances into shape before they face higher payments when interest rates are eventually hiked.
"However, we do anticipate that many households will face a rocky ride in the future. We’re already starting to see a slight pick-up in asset management activity as the impact of public spending cuts begins to hit home.
"A future rise in interest rates, combined with the recent reduction in the rate at which Support for Mortgage Interest is paid, is only going to push up the number of the number of borrowers facing financial difficulty.”