Its rate-setting Monetary Policy Committee has voted to maintain rates at the historic low of 0.5%.
It also decided not to increase its programme of quantitative easing, having lifted it by £50bn last month.
Following last month's additional £50bn, the total value of the Bank's QE programme now stands at £375bn.
Ben Thompson, managing director of Legal & General Mortgage Club, said: "Following the dismal estimated GDP figures for the second quarter, as well as the most recent poor manufacturing surveys, many will be hoping for an Olympic boost to the results over the next three months and some sort of meaningful improvement.
“Some are sceptical as to whether we will actually see this now, so optimism is fading somewhat.
“No change to QE or the rate itself this month was surprise, however there is a good chance the Bank will have to act again later in the year if this pessimism is well placed and we see no new positive signs of growth. This may come in the form of a cut to the base rate.
“On the positive side, since Mervyn King addressed his audience at Mansion House and unveiled details of the Funding for Lending Scheme (FLS), we have seen headline mortgage rates plummet to record lows.
“Some lenders are simply falling over themselves to court the best, so-called lowest risk borrowers, so much so that we have seen the cost of two year fixed rates fall by 0.7% over this short timeframe, and five year fixed rates by 0.9%.
“Although this won't cure the ills of our wider economy, it appears as though the FLS is having positive direct and indirect benefits, and this will be felt in some borrowers' pockets later in the year and create new additional spending power.”
Andrew McPhillips, chief economist at Yorkshire Building Society, said: "Despite the poor GDP figures released last week there was always a strong likelihood that the MPC would take no action at this meeting.
“There is still no convincing case to support a Base Rate cut in my opinion and the minutes of the meeting in July indicated that the MPC would wait to see what impact the Funding for Lending Scheme has before reconsidering the current stance on a rate cut.
“The announcement of further QE in July was also made in the expectation that the GDP figures for the second quarter would be poor, so whilst the scale of the contraction was worse than expected, the negative figures should not have been a surprise.
“Unless there are any major negative impacts in the next three months, such as a country leaving the Euro for example, the MPC are likely to wait for the completion of the latest expansion of QE and the introduction of FLS to have an impact before making any further changes to monetary policy."
And Ray Boulger, senior technical director at John Charcol, agreed with McPhillips. He said: “Despite the even worse than expected Q2 GDP figures and a raft of other negative economic statistics for the UK, the MPC is likely to want to see what impact its Funding For Lending Scheme has before taking any further measures to stimulate the economy. With London being such an important part of the economy and warnings for non Olympic visitors to stay away from the Capital appearing to have been overdone, resulting in significantly lower than normal other activity, this could easily negate the hoped for boost to Q3 GDP from the Olympics.
“The news from the ECB today is likely to generate much more interest than the MPC. The ECB appears to be in serious danger of over promising and under producing."
What should borrowers do now?
Boulger added: “Swap rates and three month Libor have both fallen by around a quarter of a percent since the Mansion House Banquet speeches from The Governor and The Chancellor and three month Libor, currently 0.74%, is still falling. This combination, plus the Funding For Lending Scheme, has produced record low 5-year fixed rates, with three lenders offering a sub 3% rate for LTVs up to 60%. Apart from Nationwide’s 3.39% rate up to 70% LTV other lenders, especially at the higher LTVs, need to play catch up.
“Current rates available on 5-year fixed rates up to 70% LTV offer excellent value but for those needing higher LTVs there is merit in waiting until the market settles down, when I expect better value will be available. With the best 5-year fixed rates now available at, or below, rates for shorter term fixes and even most trackers, the value sector of the market is currently undoubtedly 5-year fixes, even factoring in the possibility of Bank Rate getting even closer to zero later this year.”
