The Bank of England’s Monetary Policy Committee (MPC) has voted to hold the Bank Rate at its historic low of 0.25%.

The vote was 6-2, compared to 5-3 vote at the last meeting in June, and 7-1 in May.

Tom Stevenson, investment director for Personal Investing at Fidelity International, said: “It seems the bank is reluctant to rock the economic recovery by hiking rates just yet and the Bank’s view on growth has also been downgraded since the May meeting.

“Three months ago, the Bank expected GDP to rise by 1.9% in 2017, 1.7% in 2018 and 1.8% in 2019. This time, the equivalent forecasts are 1.7%, 1.6% and 1.8%.  What’s driving that sluggish growth is the other key figure in today’s smorgasbord of data – inflation.

“While growth is running a bit cooler than expected, inflation is a bit hotter in the near term and safely above the Bank’s 2% target. And that is squeezing consumers’ spending power because household earnings are not keeping pace with prices. Again, the Bank has tweaked its expectations on inflation. Three months ago, it was looking for prices to rise by 2.6% this year, by 2.6% in 2018 and 2.2% in 2019. Today’s forecasts are respectively 2.7%, 2.6% and 2.2%.”

Tim Graf, head of macro strategy for EMEA at State Street Global Markets, added: “The downside surprise in June inflation figures looks a pivotal event in today’s outcome, with a rate hike now looking unlikely for the remainder of this year, probably much longer.

“Indeed, our gauges of online retail inflation, showing sharp deterioration in annual inflation rates, suggest the MPC can afford to wait and see if political uncertainty takes any further toll on already softening growth and inflation data.”