The Monetary Policy Committee held the rate at 0.5 per cent for the second consecutive month after last cutting the rate in March to its current historic low.
The Bank noted that consumer price index inflation is well above its 2 per cent target at the moment at 2.9 per cent but warned it would drop below this later in the year and so the MPC decided that to bring it back to target over the medium term the base rate should remain at 0.5 per cent.
Adrian Coles, director-general of the Building Societies Association, says:
The Bank’s interest rate decision is no surprise. While hard pressed savers should see interest rates maintained, this decision does nothing to help lenders to attract new deposits that could be used to fund mortgage lending.
The Bank also revealed it will increase its asset purchase scheme to help ease funding pressures for bank lending and help fight off the recession.