The Bank of England bank rate has been held at 0.5 per cent for the 25th month in a row and quantitative easing stays at £200bn.
The last rate change was on March 5, 2009, when it was reduced from 1 per cent to 0.5 per cent.
On the same day, the Bank of England initiated a £75bn QE programme. The most recent change to the size of the programme, on November 5, 2009, was an increase of £25bn, bringing the total to £200bn.
The MPC is currently split over base rate, with three of the nine committee members – Andrew Sentance, Spencer Dale and Martin Weale – calling for base rate to be increased.
The minutes of today’s meeting will be published later this month and will reveal which way committee members voted.
HML director of strategy Jeff Quilter says: “The Bank of England is caught between a rock and a hard place. If it increases interest rates to combat inflation levels of 4.4 per cent then variable rate and tracker mortgage holders will feel the knock on effect and their finances will face another squeeze at a time when wages have dropped in real terms.
“If rates stay at 0.5 per cent then it is possible that inflation will continue the current trend moving further away from the Government’s 2 per cent target and falling further out of sync with wages.”