Two members of the MPC voted to cut the rate by 0.25 percentage points to 5%.

Experts have said that there is a change of a base rate cut in the second half of this year, possibly as early as June or more likely August.

The Bank sees inflation trending down over the next two years but with risks of a blip.

CPI inflation has fallen steadily over the past year to 3.2% but remains above the bank's 2% long term target.

The Bank's base rate is currently at its highest level for 16 years.

The MPC says it has no plans to alter its strategy of striving to reduce CPI inflation towards its long-term target of 2%.

However, with signs of slow UK economic growth and inflation indicators pointing downwards a number of experts believe a small cut in the base rate could be needed to boost growth.

The MPC said CPI inflation was expected to fall to 1.9% in two years time and 1.6% in three years.

In its Monetary Policy Summary the MPC said: "Following modest weakness last year, UK GDP is expected to have risen by 0.4% in 2024 Q1 and to grow by 0.2% in Q2.

"CPI inflation is expected to return to close to the 2% target in the near term, but to increase slightly in the second half of this year, to around 2½%, owing to the unwinding of energy-related base effects. There continue to be upside risks to the near-term inflation outlook from geopolitical factors, although developments in the Middle East have had a limited impact on oil prices so far.

"Conditioned on market interest rates and reflecting a margin of slack in the economy, CPI inflation is projected to be 1.9% in two years’ time and 1.6% in three years in the May Report."

"Monetary policy will need to remain restrictive for sufficiently long to return inflation to the 2% target sustainably in the medium term in line with the MPC’s remit. The Committee has judged since last autumn that monetary policy needs to be restrictive for an extended period of time until the risk of inflation becoming embedded above the 2% target dissipates."

The next base rate decision will be on 20 June.

Jonny Black, chief commercial & strategy officer at Abrdn adviser, said: “The Bank’s decision today dashes hopes that May would see the start of rates unwinding.   

“Caution is the MPC’s byword. It won’t be rushed into what it might view as a hasty decision if it still thinks inflationary pressures are too high and there’s a risk of price rises accelerating again. One factor that might currently be giving it pause for thought is the recent National Living Wage rise. Ratesetters will want to make sure that the impact of this is known before moving ahead with a reduction."

Colleen McHugh, chief investment officer of consumer investment platform Wealthify, said: “Today's decision to maintain the base rate at 5.25% came as no surprise to the markets, yet the certainty of a summer rate cut remains in question. In the lead up to today’s decision, Governor Bailey’s optimism - where he drew a clear distinction between the US and UK inflation outlooks - certainly suggested the Bank of England may be happy with policy divergences and entertain the idea of a potential rate cut by the summer.

“However, the question remains: is a summer cut a foregone conclusion? Despite service inflation persisting at 6%, primarily driven by wage growth, the rate at which this inflation will dissipate remains uncertain, particularly with tight labour markets. Market expectations imply a base rate of just under 5% by year-end, and today's decision hasn't altered pricing. Like all central banks, the Bank of England’s decisions hinge on data and are subject to constant flux, and there is no shortage of this currently!”