The Bank also kept its programme of quantitative easing at £200bn.
One member of the MPC, Adam Posen, has consistently voted for an extra £50bn of QE while Martin Weale, another MPC member, delivered a speech on 25 August at a lunch hosted by the Doncaster Chamber of Commerce declaring such an action was not needed.
Weale said: “I do not think our August forecast or the more recent market movements since then as yet make a case for such a policy.
“Although the economy is weaker than we would like, business surveys do not suggest the picture is, at present, like that of the summer of 2008.”
Richard Barker, mortgage manager at N&P, said: “The decision to leave Base Rate unchanged at 0.50% for the 30th month in a row was widely expected across the market. Although the current Consumer Prices Index inflation figure remains well above the government’s target, the UK economy remains relatively fragile at present and any increase is now predicted to occur in 2012. Recent housing market data suggests that house prices fell slightly in August and affordability for first time buyers is stretched, further reinforcing the argument to keep rates on hold for longer.
"Whilst the Base Rate remains low, variable rate mortgages are likely to remain popular with many borrowers."
And Ben Thompson, managing director, Legal & General Mortgage Club, added: "Another pretty straightforward decision this month however there will no doubt have been much to discuss. The Bank hasn't quite played all its cards in terms of stimulus for the economy and could still launch another round of QE, however the jury is out in terms of the benefit of doing this unless absolutely necessary. We expect rates to remain unchanged for a long time with QE kept under constant review and this will be tremendous news for borrowers but quite the opposite for savers, many of whom have had to dig deep into their savings to boost their income and cover costs."
Minutes of the August MPC meeting revealed that the decision to hold the Bank Base Rate was unanimous when previously two members had regularly voted for an increase to ward off rising inflation one of which was Weale.
Weale said he changed his mind because of the weaker economic outlook, noting the slowdown in the US and the problems in the eurozone area.
The results of how Weale and other members of the MPC voted on various propositions today remains unknown until the Bank releases the minutes of the meeting on 21 September.
