The decision was widely expected in the financial community, despite figures last week revealing an upwards revision of growth in the economy from 0.1% to 0.3% for the last quarter of 2009.

The Bank did not extend quantitative easing (QE), its programme of stimulating the economy by buying private sector assets, which it halted last month at £200bn. It said that future purchases would be funded by issuing Treasury bills rather than using central bank reserves.

There has arguably been little evidence that QE is having the desired effect of increasing business lending – it contracted by £4.3bn in December, according to the Trends in Lending report by the Bank in February.

As a result of the contraction, the 12-month growth rate of the stock of loans fell to a new low since the monthly series began in 1999, and major UK lenders also reported that net lending flows remained weak throughout January of this year.

The report showed that in the fourth quarter of 2009, the stock of lending to companies fell across all main sectors of the economy for the third consecutive quarter. For manufacturing, it was the fifth consecutive negative quarter.

Major UK lenders reported there had been "no significant change" in loan availability in the past month. But some major lenders did report downwards pressure on loan pricing for "better quality companies".