BoE: Interest rates held at 0.50pc

The MPC also said it would make no change to the amount of monetary stimulus it provides through quantitative easing.

The decision to hold both rates and QE at current levels was widely anticipated with the MPC delivering the results of its consultation on forward guidance next Wednesday.

Barry Naisbitt, chief economist at Santander UK, said: “Recent economic news has been more positive – economic growth in the second quarter was stronger than in the first and confidence indicators are showing a bit of a revival.

“But output is still well below its pre–recession level and the unemployment rate has not shown any convincing signs of a sustained reduction.

“There has been considerable media attention on the new Bank of England governor, Mark Carney, to see what changes he and the Monetary Policy Committee might make to monetary policy.

“With inflation at 2.9% and the MPC about to reveal its hand on the possibility of offering forward guidance on policy, the decision to hold Bank Rate and quantitative easing again this month was widely expected.”

Simon Gammon, head of Knight Frank Finance, agreed that the decision to hold rates at the current level was unsurprising.

He added: “It will be interesting to hear Mark Carney’s first in-depth analysis of the UK economy at next week’s Inflation Report.

“There is much more activity in the mortgage market however, with many more borrowers deciding to review their current home loan deals.

“There is plenty of movement in the large loans market too, with some of the most competitive mortgage deals now being offered by high street banks on loans of more than £1m – a trend that has not been seen since before the downturn.

Ben Thompson, managing director of Legal & General Mortgage Club, said that the decision to hold the base rate would come as a relief to borrowers.

“Low rates, combined with the first few reports of homebuyers coming through the Help-to-Buy scheme, highlight the confidence that is returning to the market.

“However, the debate continues around whether Help-to-Buy is set to cause a housing bubble. Whilst the market appears to be thriving in some areas, it is a slower process across other regions in the UK. The recovery is currently being supported by government stimulus.

“To suddenly remove such support would risk a stagnation or reversal of the headway that’s been made.

“Whilst the signs are all positive, the industry needs to consider how it will sustain itself once external stimulus is removed. A start would be to tackle the issue of suitable housing currently available.”