The Bank of England's rate-setting body unanimously decided to leave the key rate unchanged for the first time since August after two policymakers abandoned their call for a rate hike.
The Monetary Policy Committee, governed by Mark Carney, voted 9-0 to retain the base rate at 0.50 percent, the minutes showed Wednesday. Also, all members were in favor of maintaining the size of quantitative easing at GBP 375 billion.
The MPC said the outlook justified maintaining both the current level of Bank Rate and the stock of asset purchases financed by the issuance of central bank reserves.
Ian McCafferty and Martin Weale sought a quarter point rate hike at the previous five consecutive meetings.
For the two members who had voted in the previous month for an increase in Bank Rate, the decision this month was finely balanced, the minutes showed.
These policymakers noted that the risk that low inflation might persist for longer than temporary factors implied and concluded that this risk would be increased by an interest rate hike at the current juncture.
Data from the the Office for National Statistics revealed last week that U.K 's inflation slowed to a record low 0.5 percent, well below the central bank's 2 percent target.
An interest rate rise still looks a way off, with the MPC turning its attention in its recent meeting to the risks of a persistent period of low inflation, Vicky Redwood, chief UK economist at Capital Economics, said.
The minutes said inflation is expected to reach a trough of around zero in March, as lower oil prices fed through to petrol prices, with a roughly even chance that it would temporarily dip below zero at some point in the first half of 2015.
It was possible that the fall in near-term inflation might become more persistent if it lowered inflation expectations, pay and other cost growth in a way that became self-perpetuating, the minutes said.
Further, it was also seen possible that the pace of nominal wage growth would be weaker than otherwise and that this would feed into lower subsequent price inflation. Consequently, inflation could be persistently below the target for longer than previously expected.
Lower oil prices, if sustained, would act as a stimulus to growth in the U.K. and its main trading partners.
The early signs of a pickup in private sector average weekly earnings growth tentatively suggested that slack was either lower or being absorbed more quickly than previously thought.
During the three months to November, average earnings increased 1.7 percent from the previous year, the Office for National Statistics reported today. The ILO jobless rate fell to 5.8 percent from 7.1 percent in the previous year.
The Agents' summary of business conditions revealed that growth in total labor costs per employee had been steady, though there were signs of increasing wage pressures in some sub-sectors with skill shortages. Employment intentions had eased for manufacturers, but were consistent with modest head count growth overall.
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May 01, 2026 15:54 ET Central banks dominated the economics news flow this week with almost all major ones announcing their latest policy decisions and many boosted expectations for a rate hike in June. In other news, several countries released the preliminary data for first quarter economic growth. In the U.S., comments by Fed Chair Jerome Powell were also in focus as his term ends this month.