Rates have been stuck at 0.5 per cent since March 2009 but there has been mounting speculation that they could rise at the turn of the year as the UK economy strengthens.

Despite the fact the Bank upgraded its growth forecast for this year from 2.5 per cent to 2.8 per cent, eight of the nine members of the MPC voted against a rate raise in August.

Meanwhile, the Bank has revised down its near-term inflation forecast. Price growth, as measured by the consumer prices index (CPI), stood at zero in June – and the Bank expects it to remain at around this level until September at least.

It attributed this to a number of factors, including falling commodity prices over the quarter, although policymakers do not expect the UK to slip back into deflation outright, like it did earlier this year.

It also noted that inflation would currently stand at 1.5 per cent if falling energy, food and import prices were not factored into current calculations.

When inflation does return, it is expected to sharply rise to around 0.5 per cent by the end of the year, and then 1 per cent by February 2016.

In the long-term, the Bank believes inflation will reach Governor Mark Carney’s stated target of 2 per cent target in two years, before rising further to 2.1 per cent a year later.

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