Bank of England (2)

The Bank of England has kept interest rates at 0.5% for another month, despite widespread expectations that they would be cut to 0.25%.

The Bank of England's Monetary Policy Committee (MPC) voted 8:1 in favour of keeping rates and its quantitative easing package on hold.

Earlier this month, the Bank of England's governor Mark Carney said “some monetary policy easing” would be needed this summer to maintain economic growth.

Around 80% of City analysts expected rates to be reduced to a new record low of 0.2%.

Jeremy Cook, chief economist at World First, said: "It would be very unwise for a central bank to fire its remaining rounds with little knowledge or certainty as to the size of the enemy it faces. We have had almost no post-Brexit data and while inflation may move higher courtesy of a weaker pound and growth will likely take a hit... Carney and the MPC have never been fans of acting for acting’s sake despite being one of the strongest advocates of financial disruption as a result of a vote for Brexit.”

Although there is a lack of data on the economy following the EU referendum, a gloomy picture has been painted for June. According to a series of closely watched surveys, construction performance fell to a seven-year low and the UK's vital services sector slumped to its slowest growth in three years in the run-up to the referendum.

Interest rates have been at the record low of 0.5% since March 2009. Before the EU referendum, analysts had spent the past few years debating when interest rates would be increased. Now, many believe rates could be as low as zero by August.

Although a reduction in interest rates would have been good news for borrowers, the same cannot be said for savers.

A 0.25% rate would result in a £26 a month saving on a £200,000, 25-year repayment mortgage, according to the Council of Mortgage Lenders. City analysts at Hargreaves Landsdown said savers have lost out on an estimated £160 billion on interest since 2009 when rates were first lowered to 0.5%.