The Bank of England has announced it will hold interest rates for another month.
The central bank's Monetary Policy Committee met today (May 9) and voted seven to two to keep rates as they are.
The two that voted against this wanted to see it dropped to 5 per cent.
The base rate first rose to 5.25 per cent in August and has been held at this rate since.
In an update, the bank said while progress is encouraging it is not yet at a stage where it can start cutting the rates.
The committee's report said: "The MPC remains prepared to adjust monetary policy as warranted by economic data to return inflation to the 2 per cent target sustainably.
"It will therefore continue to monitor closely indications of persistent inflationary pressures and resilience in the economy as a whole, including a range of measures of the underlying tightness of labour market conditions, wage growth and services price inflation."
Andy Mielczarek, CEO of Chetwood Financial, said it was the right decision to hold the interest rate and cutting it at this point would have been short-sighter.
He said: "The reality is that despite recent decreases in inflation, we have yet to hit the bank’s 2 per cent target. We are seeing signs that the economic landscape is warming, so we must ensure that we have the stability and resilience necessary for future growth.
"A high-interest environment means difficulties for those with variable mortgage payments contributing to an already-high cost of living, but these are necessary evils for the UK’s economic recovery. As long as the base rate stays high, savers need to shop around to maximise the returns they are getting from the savings market and get their financial goals back on track."
Paresh Raja, CEO of Market Financial Solutions, said the decision did not come as a surprise with expectations that the first cut would come between June and August.
He added: "When the base rate falls, and how quickly, remains to be seen. But the bigger picture is that the property market has slowly but surely gone through a period of adjustment over the past two months – the reality has sunk in that rates will not get back to the low levels many borrowers had become accustomed to throughout the 2010s.
“A base rate above 4 per cent is highly likely for the next 12 to 18 months, and the sense of inertia is steadily fading away as buyers and investors decide to re-enter the market.
"So, now is the time for lenders to be flexible and embrace a ‘can-do’ attitude, ensuring the right products are available to brokers and their clients in a timely manner, allowing fresh life to be breathed into the market."
Ryan Davies, strategy director at Bluestone Mortgages, said it was a blow for would-be and existing borrowers.
He added: "For those concerned about how ongoing affordability challenges will impact their homeownership ambitions, remember that there is always help at hand. Whether that be getting in touch with their mortgage lender, or speaking with a broker to understand the different options available, it’s our duty as an industry to help these customers step onto or up the property ladder."
While Tony Hall, head of business development at Saffron for Intermediaries, said the conversation was shifting from when, rather than if, rates would fall.
At the end of April, deputy governor Dave Ramsden said the risk of persistent inflation pressures were receding.
In a speech on April 19, he said: "Over the last few months I have become more confident in the evidence that risks to persistence in domestic inflation pressures are receding, helped by improved inflation dynamics."
tara.o'connor@ft.com
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