The Committee also voted to maintain the stock of purchased assets financed by the issuance of central bank reserves at £375 billion.
Last month, the two MPC members who had previously pushed for a bank rate increase backed down, stating that "risk would be increased by an increase in Bank Rate at the current juncture."
In the minutes of the last MPC meeting, members agreed that low inflation might persist for longer than previously expected following a drop in CPI growth to its lowest level since records began in 1996.
The meeting concluded by stating that "when Bank Rate did begin to rise, it was expected to do so only gradually, and more slowly than in previous cycles. Moreover, the persistence of those headwinds, together with the legacy of the financial crisis, meant that Bank Rate was expected to remain below average historical levels for some time to come."
Jeremy Duncombe, Director, Legal & General Mortgage Club, commented:
"Today's decision to keep the base rate at 0.5% marks nearly six years of record low interest rates. However, whilst the bank rate has not moved, the rates that lenders offer to borrowers on mortgages have, as banks will also look at wider economic conditions when deciding the rates they offer.
"Current expectations are that a rise in the Bank of England base rate is now deferred until early next year. Therefore there might be a temptation for consumers to delay looking for new mortgage deals, believing they can wait until later in the year to switch. This may not be the case. The very low deals currently on offer will not be around forever."
Barry Naisbitt, Chief Economist, Santander UK, said:
"The Monetary Policy Committee’s decision to hold Bank Rate today was, once again, not a surprise. The big change last month was that the two MPC members who had been voting to raise rates changed their votes, making the decision to hold rates unanimous. In advance of this month’s 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 continued to show steady growth, with the PMI output indicators positive in January and the unemployment rate has now fallen below 6%. The effect of falling oil prices is being seen in CPI inflation, which was at a very low 0.5% in December and could fall further in the coming months. This current very low inflation backdrop should provide scope for the MPC to continue to hold rates at their current level."
