BoE maintains bank rate

The Committee also voted to maintain the stock of purchased assets financed by the issuance of central bank reserves at £375 billion, and so to reinvest the £4.35 billion of cash flows associated with the redemption of the January 2015 gilt held in the Asset Purchase Facility.

Last month, two of the nine Monetary Policy Committee members continued to vote for a bank rate increase of 25 basis points.

Mark Carney recently stated that markets still expect Bank Rate to increase, but to a more limited extent and at a more gradual pace than they did earlier in 2014.

NIESR predict that the Bank of England will hold interest rates until after this year's general election, forecasting a rise from the current level of 0.5% to 1% by the end of 2015 before rising gradually to to 2.75% by the end of 2019.

The latest policy meeting minutes stated that "headwinds weighing on the economy, together with the legacy of the financial crisis, meant that Bank Rate was expected to remain below average historical levels for some time to come."