Base rate held for 75th month

The MPC also opted to maintain the quantitative easing programme at £375bn.

Just 8% of brokers expect the first base rate rise to happen in 2015, United Trust Bank’s broker survey found today.

Barry Naisbitt, chief economist at Santander, said: “The Monetary Policy Committee announcement that Bank Rate was again being held at 0.50% came as no surprise.

“In advance of this month’s MPC meeting it seemed unlikely that the economic news and data over the past month would have been strong enough to support a change in view for the majority of MPC members.

“The latest indicators of economic activity have shown growth continuing, although the second estimate of GDP growth for the first quarter held the initial estimate of just 0.3% growth.

“With the inflation rate now showing falling prices relative to a year ago and the governor having recently written to the Chancellor to explain the undershoot of the inflation target, the current very low inflation backdrop will have provided scope for the MPC to continue to hold rates at their current level.”

The minutes for the meeting will be published on Wednesday 17 June.

Chris Williams, chief executive of Wealth Horizon, added: “We will have to wait and see what the meeting minutes report, but considering the current rate of inflation, it would come as a big surprise if this was not a unanimous vote in favour of keeping rates on hold. Two members voted for a hike in rates at the end of last year but since then the decision has been a no-brainer for the committee.

“We are seeing reports of an abrupt slow-down in growth and this has effectively put any thought of interest rate hikes on the back-burner.

“There is plenty of talk about the UK building a sustainable recovery, but the economy has cooled off considerably. More is needed in terms of wage growth and productivity growth, but with the new Government poised to impose more fiscal tightening, we are far from having a picture perfect return to fortune.”