The move was nevertheless unanimously expected by economists ahead of the meeting while some implied market forecasts suggested a small chance of a rate cut.

As is the norm when the Bank hold rates unchanged, no statement was released explaining the decision.

The news comes on the heels of a 4.4% headline inflation rate and an Inflation Report suggesting that the pass-through of prices to utility costs would push CPI to above 5.0% in the coming months. Meanwhile, second-quarter GDP was flat compared to Q1.

"The MPC has clearly become markedly more concerned about the current state of the economy and the growth outlook in recent weeks, acknowledging that recession is very possible," explained Global Insight's Howard Archer ahead of the release. "David Blanchflower is particularly concerned that an extended and deep recession is possible unless interest rates are cut quickly and significantly, and he could well vote for a 50 basis point interest rate cut to 4.50% on Thursday."

Indeed, a three-way split in the Bank of England's Monetary Policy Committee in July and August has many looking ahead to Sept. 17, when the minutes from today's meeting will be released. With David Blanchflower aggressively pushing for lower rates and Tim Besley calling for rate hikes, many will be looking for clues on which side will eventually convince the remaining members.

By Erik Kevin Franco, This email address is being protected from spam bots, you need Javascript enabled to view it , edited by Nancy Girgis, This email address is being protected from spam bots, you need Javascript enabled to view it

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