Steve Radley, chief economist at EEF (the manufacturers' association): “The economy has been through a series of shocks since the credit crisis hit last summer and the Bank has been right so far in responding with a measured approach on rates. However, despite concerns on inflation, further cuts to interest rates are needed to prevent the economy from drifting towards recession.”

David Kern, Economic Adviser to the British Chambers of Commerce: "We believe this decision was a mistake given the serious threats to economic growth. The MPC has missed a valuable opportunity to underpin business and consumer confidence and to limit the potential damage to the economy.

“We are aware that the MPC cannot disregard the inflationary risks arising from surging food and energy prices, but countering the acute threats to growth must be given a greater priority in the immediate future. Plunging consumer confidence, falling house prices, and worsening pressures on bank capital are a toxic mix that must be countered by a more pro-active policy stance. We strongly urge the MPC to cut interest rates to 4.75% in June.”

Ian McCafferty, the CBI's Chief Economic Adviser: "The latest data shows the economy is slowing, albeit only gradually, and at the same time inflationary pressures continue to mount. So, the Bank faced a difficult decision, but it is no surprise that rates were kept on hold this month."

Graeme Leach, Chief Economist at the Institute of Directors (IoD): “This was a prudent decision. Inflation is far from dead and we cannot be sure as yet whether the economic slowdown underway will be sufficient to bring it under control.

"By waiting a little longer to reduce interest rates the MPC is hoping to squeeze demand and inflationary expectations a little tighter. Back-to-back interest rate reductions would have given a signal that inflation was yesterday’s problem when in reality it is still today’s and tomorrow’s.”

Adam Lent , TUC Head of Economic and Social Affairs: “This decision was expected after April’s cut. But with new official figures showing manufacturing output is falling and continuing concerns in the housing market, the Bank should be prepared to cut base rates again soon.”

Peter Spencer, chief economic advisor to the Ernst & Young ITEM Club: "Today’s vote to keep the bank base rate at 5% was probably very close given the conflicting indicators on the economy and inflation. Although the hawks appear to have won the day this time, the doves will surely have had plenty to argue about."

"We believe the case for a 25 point reduction in the base rate was perhaps stronger." A tough call had to be made today, only time will tell if it was the right one."

Barry Naisbitt, Abbey's Chief Economist: "If the slowing in economic activity is interpreted as supporting lower inflation in the medium term, a further rate cut could be on the cards, possibly as soon as next month

Philip Shaw, economist at stockbroker Investec: "We still expect rates to come down to 4.75% next month, followed by a pause."

Edward Menashy, chief economist at Charles Stanley: "The positive message to emerge from the no change decision is that the MPC does not judge the UK economy to be in a parlous condition that requires the first back-to-back reduction in interest rates since 2003."

Trevor Williams, chief economist, Lloyds TSB Corporate Markets: “This decision must have been a tough call. The threat of a steeper than expected slowdown could easily have swayed the MPC to cut, but the very real prospect of accelerating inflation is likely to have been the deciding factor.

“The Bank of England is now likely to hold out until the economic picture becomes clearer. Before deciding to cut rates again, it will want more evidence that the economy is slowing; more understanding of the effects of its recent efforts to revive credit markets; and crucially, a better view of whether rising commodity prices are pushing up consumer price inflation.”

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