The Committee also voted to maintain the stock of purchased assets financed by the issuance of central bank reserves at £375 billion.
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."
Nick Dixon, Investment Director at Aegon UK, added:
“With inflation flat-lining and wage growth yet to take off, we are unlikely to see any change in interest rates until well into 2016. It is a challenging environment for the new Conservative government to try to reduce spending, and with fiscal policy potentially looser than planned we may see a more hawkish monetary policy through 2016-17 to help tame inflation during this Parliament. Looking further ahead, bond yields could be too optimistic and seem to be under-estimating future rate increases.”
