The Monetary Policy Committee (MPC) also agreed to maintain its £125bn quantitative easing (QE) programme.

Minutes of the committee's July meeting showed it expected growth data for the second quarter to show a smaller fall than it had anticipated back in May.

Economic growth data is due on Friday. GDP fell by 2.4% in the first quarter.

The committee noted that a lack of bank lending was still weighing on the economy.

The key question for policy-makers was whether they needed to make an immediate change to its asset-purchasing programme.

But the minutes said: "Little evidence had emerged since May to change the Committee's views about the broad shape of the prospects for the economy in the medium term, although the downside risks to GDP in the near term had probably diminished."

It added that more reliable data would be published next month in its next inflation report.

The British Chambers of Commerce (BCC) criticised the MPC for not providing an "adequate explanation" for its decision not to extend quantitative easing.

"We believe that the risks of a relapse in economic activity are still serious," said David Kern, chief economist at the BCC.

"With bank lending remaining weak and unemployment continuing to rise, there is still an urgent need to reinforce the stimulus. We urge the MPC to increase the QE programme at its next meeting."

SOURCE: BBC News