The Bank of England's Monetary Policy Committee (MPC) has voted to maintain interest rates at 0.75% by a majority of 7-2, with further rate cuts now being considered amid slowing growth and an expected fall in inflation.
In Thursday's (7 November) meeting, which also saw unanimous agreement to maintain corporate and government bond buying at £10bn, the bank opted to maintain the rate amid a CPI inflation rate of less than its 2% target at 1.7%.
The MPC's report said that while underlying UK GDP growth has "slowed materially this year", reflecting "weaker global growth, driven by trade protectionism and the domestic impact of Brexit-related uncertainties", the "existing stance of monetary policy is appropriate".
With regard to CPI, the MPC expects this to decline by around 1.25% in the Spring of 2020 owing to the "temporary effect of falls in regulated energy and water prices", before rising to its 2% target and eventually exceeding it in the following years.
The Bank of England said looking ahead monetary policy could "respond in either direction to changes in the economic outlook in order to ensure a sustainable return of inflation to the 2% target".
It added: "If global growth fails to stabilise or if Brexit uncertainties remain entrenched, monetary policy may need to reinforce the expected recovery in UK GDP growth and inflation.
"Further ahead, provided these risks do not materialise and the economy recovers broadly in line with the MPC's latest projections, some modest tightening of policy, at a gradual pace and to a limited extent, may be needed to maintain inflation sustainably at the target."
Head of research at Kingswood Rupert Thompson said the split vote reflects the "shift in recent months both by the bank and the market away from the view that rates will necessarily have to head higher".
He added: "The Bank continues to state that modest policy tightening at a gradual and limited pace might be needed if the economy performs as is expected. Yet, it also highlights that a rate cut could be necessary if downside risks materialise.
"In a nutshell, the Bank is sitting on the fence and keeping its options open."
Manager of the Man GLG Strategic Bond fund Craig Veysey said the BoE was "never going to cut rates this close to a General Election", with the MPC keen to "save what little ammunition it has left for a possible recession", which "may be realised in the coming year".
He added: "With rates as low as they are, and the committee having expressed no desire for negative rates in the future, more QE and possibly two-to-three rate cuts are likely to be the only bullets it has left to fire."
CIO of Close Brothers Asset Management Nancy Curtin said that with the BoE "due a change of leadership" as Mark Carney prepares to step down as governor, "fiscal policy may be more significant than monetary policy in months to come".
She added: "MPC members have been sitting on their hands as Brexit, and now the winter General Election, take centre stage.
"Business confidence is at a ten-year low and weighing on investment spending. We expect this to continue to hinder growth while Brexit uncertainty persists, but robust employment data and real wage growth should continue to support consumption."