The Bank of England has backtracked on its previous hawkishness with just two members of the monetary policy committee voting in favour of an interest rate hike.
All on the committee agreed rate rises should be gradual and limited.
The MPC surprised markets at its last meeting when three of the eight members voted in favour of a rate rise.
However, the committee today decided to keep the base rate at 0.25 per cent.
Meanwhile, the inflation report, also released at midday, shows the Bank of England expects inflation to rise further in coming months and to peak around 3 per cent in October.
Aberdeen Asset Management chief economist Lucy O’Carroll says it’s clear there won’t be a rate rise any time soon.
She says: “The Bank has obviously decided that this spike in inflation won’t last and there’s too much uncertainty from Brexit to hike now.”
UK GDP growth disappointed in Q1 delivering 0.2 per cent, while the first estimate for Q2 is 0.3 per cent.