The Monetary Policy Committee (MPC) voted unanimously to maintain the Bank of Engalnd bank rate at 0.5% in its May meeting.
In March 2013, the Chancellor of the Exchequer, George Osborne, called on the MPC to follow its American counterpart (the Federal Reserve Board) in committing itself to keeping interest rates low for a prolonged period of time.
The rate of 0.5% has been set since March 2010 and the first rise was not priced in until the end of 2016.
The MPC also voted to maintain the stock of asset purchases financed by the issuance of central bank reserves at £375 billion, by a count of six for to three against.
The Committee expects a “modest and sustained recovery” for the UK economy in both demand and effective supply, aided by the low Bank Rate level.
Other factors included the Committee’s programme of asset purchases, the impact of the recommendations of the Financial Policy Committee, and the extension to the Funding for Learning Scheme.
The Funding for Learning Scheme offers subsidised credit to banks and building societies in order to boost lending to UK households and non-financial companies. It had originally been due to expire in January 2014.
The nine MPC members are Charles Bean, Paul Tucker,Ben Broadbent, Spencer Dale, Ian McCafferty, Martin Weale, Mervyn King, Paul Fisher and David Miles.