Three members of the Bank’s Monetary Policy Committee voted for a 0.25% rate cut, though they were outvoted by fellow members to see the base rate remain at 4.75%.
The inflation rate rose from 1.7% in September to 2.6% in November, falling further from the Bank’s 2% target.
However those three members clearly were more concerned by the UK’s underlying economic issues than stoking further inflation – which tends to be the result of a lower base rate.
Mark Michaelides, chief commercial officer at mortgage lender Molo, said: “Today’s decision to hold rates flat at 4.75% comes as no surprise, especially after November’s inflation numbers earlier this week.
“However, what is most interesting is that the MPC itself is split on this decision, with three members voting for a cut.
“This is reflective of the UK’s struggle to stimulate growth and we are likely to see pressure increase further for a cut in February if economic indicators do not start to improve soon.”
Peter Stimson, head of product at lender MPowered Mortgages, reckons Bank will cut the base rate multiple times in 2025, which would cheapen the cost of mortgages.
He said: “The minutes published alongside today’s decision should provide some rays of hope that the next Base Rate cut may be nearer than the markets are currently forecasting.
“Rather than just making the three base rate cuts currently priced into the swap curves, if economic conditions prevail the Bank may be prepared to cut faster and deeper in 2025.
“While the Base Rate has only been cut twice in 2024, the prospect of three or more reductions in 2025 will embolden lenders to price very competitively at the start of the year as they battle for market share.”