Bank rate to stay at 0.5% on a vote of 8-1 and the Monetary Policy Committee voted unanimously to maintain the stock of purchased assets financed by the issuance of central bank reserves at £375 billion.
"Inflation is below the target and the Committee's best collective judgement is that there remain at least some underutilised resources in the economy.
"In that light, the Committee intends to set monetary policy in order to ensure that growth is sufficient to absorb the remaining economic slack so as to return inflation to the target within two years" said the Bank of England.
Nick Dixon, Investment Director at Aegon UK, commented:
"At the current pace, there may be an EU referendum before we see a rate increase. With muted consumer spending and earnings growth, coupled with low oil prices and broader inflationary pressures, there is a credible case for the Bank to keep rates lower for longer, or even cut them to provide relief to consumers. With the strong pound also dragging down exports, we are unlikely to see any upward revision of interest rates until well into 2016."
James Sproule, chief economist at the Institute of Directors said:
"The IoD continues to believe that the time is right to start normalising monetary policy. Inflation may be low for now, but the economy is growing strongly enough to absorb a modest increase in interest rates. Headline employment growth seems to have plateaued, but people are switching into full-time jobs and wages are continuing to outpace inflation – all signs of a tightening economy.
"This far into the recovery, it is worrying that interest rates are still at an extraordinary low. The ability to cut rates and stimulate the economy in times of instability is crucial, but with rates at their historic level of 0.5 per cent, this is almost impossible.
"All eyes are now on next week's meeting of the Federal Reserve. Given the strength of the domestic economy, it is perhaps surprising that interest rates have not yet started to normalise in the United States either. It would be even more surprising if the Bank of England did not follow the Fed's lead on the timing of the first rate rise. If the US makes the first move next week, the Bank of England must be prepared to act as soon as it can."
Peter Cameron, Associate Fund Manager at EdenTree Investment Management commented:
"The case for rate rises remains flimsy in the current environment. The UK's exports are already struggling against the strength of Sterling, a problem that would be exacerbated by a rate rise. Hawks may point to wage growth finally showing signs of life but even this trend slipped into reverse last month and could slow further if the outlook for the global economy darkens. The Bank must measure the dangers of raising too early against the consequences of falling behind the curve. Perhaps smaller increments, 0.1% instead of 0.25%, could be considered as a way to signal intent without unnerving markets."
Paul Whitlock, Director of Savings, Charter Savings Bank, said:
"The optimism of an interest rate rise sooner rather than later lead to a brighter outlook for savers last month. However, today's decision to hold has once again hit savers below the belt.
"Unprecedented volatility in Asian stocks and global economic instability continues to ruffle the markets' feathers. It's likely the UKs longsuffering savers will be waiting well into 2016 for better returns on their money. At this pace, the US Federal Reserve will increase interest rates well before any hawkish action from the Bank of England."
IPSE Economist, Lorence Nye, comments:
"The Bank of England has continued to take the pragmatic measure of maintaining interest rates at their historic low level. Although the UK's economic performance is improving, the labour market recovery has stalled somewhat in recent months. The number of self-employed workers fell in the past quarter – which is a concern as this sector can be viewed as a key indicator of the strength of the UK's flexible labour market. "The UK also remains short of the Bank's target inflation rate of two per cent. This, coupled with recent financial market shocks in China, which have impacted on investors across the globe, justifies the MPC's decision to be cautious about increasing rates in the immediate future."
Martin Beck, senior economic advisor to the EY ITEM Club, comments:
"Today's minutes support our view that the first rate hike is likely to come in Q3 2016. By this point inflation should have accelerated above 1%, the Bank's measure of slack will have been largely used up and the dust will have settled on a US rate hike.
"However, the vote at the MPC's September meeting was of secondary importance to any clues about how the majority of the Committee had interpreted the events of the past month. Following the MPC's three way split in August, there is now a definite sense that those MPC members with a bias to tighten up policy are further away from voting for a rate hike than they were previously.
"The more dovish tone is largely a function of the changes in the international environment. Though members felt that global developments had not yet "alter[ed] materially the central outlook described in the August Inflation Report", there was a consensus that the downside risks had escalated.
"The assessment of the domestic economy was firmer, even though Bank staff had tempered their expectations for Q3 GDP growth. However, the MPC is clearly very uncertain about key aspects of the domestic outlook too, particularly around the prospects for wage growth and the likely pass through from recent exchange rate movements to inflation."
With currency in mind this decision, says Western Union Business Solutions, has given some relief for sterling and caused the pound to rebound and extend its four day rally against the dollar. Western Union went on to say that the decision "… has helped push the GBP/EUR rate close to a 3-week high although the rally is already losing steam as markets gear up for more major announcements in the next 7 days".