The MPC announced it made the decision on a vote of 8-1, with one member preferring to cut the base rate by 0.25%.
The committee said it kept the base rate in “restrictive territory” to “continue to squeeze out persistent inflationary pressures“.
This week, it was speculated that the MPC would not change the base rate amid ongoing uncertainty in the geopolitical environments and the spending cuts planned by the UK Government.
The minutes of the meeting reflected this as the committee said that, since it last met, “global trade policy uncertainty has intensified, and the United States has made a range of tariff announcements, to which some Governments have responded.
“Other geopolitical uncertainties have also increased and indicators of financial market volatility have risen globally.”
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The MPC said although UK GDP growth estimates had been stronger than expected, business survey indicators suggested a weakness in growth and employment plans.
It also said inflation was predicted to rise to 3.75% by Q3 this year, despite a fall in global energy prices, and said even though inflation was expected to decline, it would keep an eye on any signs of lasting pressures.
The MPC said: “Monetary policy will need to continue to remain restrictive for sufficiently long until the risks to inflation returning sustainably to the 2% target in the medium term have dissipated further.
“The committee will decide the appropriate degree of monetary policy restrictiveness at each meeting.”
This article was first published on YourMoney.com‘s sister site, Mortgage Solutions. Read: Base rate held at 4.5% as MPC takes ‘restrictive’ measures to tackle inflation
