The Bank of England’s Monetary Policy Committee (MPC) voted 8 – 1 to hold its base rate at 4.5% today, in a widely expected move.

The decision follows a 0.25% cut to the base rate to 4.5% at the last meeting in February.

The rate is at its lowest for over 18 months.

One member of the MPC wanted to reduce the rate by 25 basis points to 4.25%.

The next base rate decision from the MPC is expected on 8 May.

In the UK, CPI inflation spiked in January to 3% from 2.5% in December. The rising cost of transport, food and non-alcoholic drinks was the biggest contributor to the rise, the highest CPI rate for 10 months.

Rises in private school fees, partly due to the addition of VAT, and a smaller than expected drop in air fares also fuelled the spike. Industry experts are predicting that CPI could hit 3.7% by the autumn before subsiding.

The Bank of England said that the UK economy has performed broadly in line with its expectations since its February Monetary Policy Report, despite some increase in geopolitical and global trade policy uncertainty. It added that its view on the future of the UK economy depended on “rapidly evolving” global trade policy.

In a statement today, the MPC said it does not expect to make major changes to the base rate any time soon.

It said: “The Committee will continue to monitor closely the risks of inflation persistence and what the evidence may reveal about the balance between aggregate supply and demand in the economy.

"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.”

Reaction to the MPC decision was muted.

Jonny Black, chief client experience office at Aberdeen Adviser, called today’s decision a “wait and see” reaction which may have disappointed many.

He said: “Today’s decision to ‘wait and see’ reflects caution in the current global economic and political environment. Those who think more needs to be done to support economic growth, especially after the surprise contraction in GDP revealed last week, may be disappointed with the result.

“For savers, it’s a good reminder to make sure that their financial plans will deliver for any outcome – whether that’s revisiting the balance of cash or non-cash assets they hold, or simply checking that their saving strategy is still supporting their goals amid economic and market volatility.”

Lindsay James, investment strategist at Quilter, said the decision on the base rate was largely “taken out of” the Bank of England’s hands and all eyes will now be on the Chancellor’s upcoming Spring Statement.

She said: “The economy remains under pressure, evidenced by a surprise 0.1% contraction (in GDP) seen in January. With the economy well and truly flatlining, government spending is being forcibly cut to manage the vanishing fiscal headroom.

“The Spring Statement is now just a week away, and all eyes will be on the Chancellor as she details just how significant the changes will be, and whether there will be any rabbits pulled from hats."