The MPC kept the main interest rate at 0.5%, a record low it has been at since the height of the crisis, while maintaining the QE programme at £325bn.
The MPC’s decision comes after some surprisingly positive data in the last week.
The Markit/CIPS UK Services PMI survey showed activity in the servcies sector grew at the same pace in May as in April, defying expectations of a slowdown in growth. The survey index was 53.3 in May, unchanged from April, with a reading above 50 indicating growth.
The services sector is the UK’s main driver of GDP, accounting for about 74%.
The move to leave rates on hold comes despite the double-dip recession. The latest data showed the economy contracted by 0.3% in Q1, worse than the initial estimate of 0.2%.
Chris Parrish, group treasurer at Yorkshire Building Society, commented: “As widely expected, the Bank of England’s Monetary Policy Committee confirmed that the Base Rate would remain unchanged at 0.50%.
“The economy entered recession for the second time in the first quarter of this year and prospects for future growth over the short-term look very limited. Issues further afield in mainland Europe serve only to exacerbate uncertainty.
“Recent money market projections suggest that Base Rate could remain unchanged at 0.50% until the end of 2015 at the earliest, given the current state of the UK economy.”
