Three members of the monetary policy committee voted to cut the rate by 0.25% but this was overridden by the majority, in a 6-3 vote.

The decision to hold the rate was widely expected, with fears about rising inflation, which hit 2.6% in the latest CPI figure for November, one of the Bank’s key measures. 

However, growth is anaemic, with GDP down at 0.1% and some economists have warned that stagflation could take hold. Businesses are also curbing hiring and are worried about huge rises in employment costs from April when the employers’ national insurance hike kicks in.

The Bank was not convinced by the growth concerns although it did warn that ‘most indicators of UK near-term activity have declined. Bank staff expect GDP growth to have been weaker at the end of the year than projected’.

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