Bank of England keeps rates unchanged at 0.5%

(EPA)

The Bank of England has kept interest rates unchanged at a record low of 0.5 per cent and maintained its quantitative easing programme at £375 billion.

Last month, two of the Monetary Policy Committee’s nine members – Ian McCafferty and Martin Weale – called for a quarter-point rise to 0.75 per cent.

But pressure to hike rates remains muted with inflation at 1.3 per cent- an uptick but well below the Bank's 2 per cent target. Threadneedle recently warned inflation could drop to 1 per cent in the next six months as the ongoing supermarket war and falling oil prices pile on disinflationary pressure.

“It would now be a surprise if the Bank raised interest rates before the latter months of 2015, especially given the disinflationary pressures coming from very low oil prices,” said Howard Archer chief UK economist at IHS Global Insight. He added a hike before May's general election looks “highly improbable”.

According to a Reuters poll, economists are expecting a hike in the third quarter of 2015. Rates have been on hold since March 2009 with the overall majority of MPC members voting in favour of keeping monetary loose.