Policymakers voted 8-1 in favour of a freeze on interest rates and 9-0 in favour of holding the quantitative easing programme at £375 billion.
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The battered pound surged by more than 2 percent as the central bank held its Bank Rate at 0.50 percent, contrary to widespread expectations of a first cut in more than seven years.
“But alongside the inaction, we got an extremely dovish signal from the Bank’s Monetary Policy Committee that helped calm markets, which had been expecting a lot more”.
The benchmark rate will remain at the already-low level of 0.5%, which it has coasted along at since it was last cut back in March 2009 (from 1%).
Finance minister George Osborne has meanwhile said the Treasury could expand the so-called Funding for Lending scheme, which provides cheap finance to banks in exchange for increased lending.
The central bank said that “the improved resilience of the core of the United Kingdom financial system and the flexibility of the regulatory framework” had allowed the post-vote impact to be dampened rather than amplified.
Sterling soared on the news as speculators had expected some response to the fall in the value of the pound since the Brexit vote, but instead the Bank’s governor Mark Carney made a decision to tough it out.
Philip Hammond, Britain’s new Treasury chief, acknowledged that the Brexit vote had caused “at least a temporary loss of confidence in the business community”.
Mr Carney sent a clear signal two weeks ago that stimulus was on the way, in an attempt to show the economy was in safe hands even as Britain’s political leadership crumbled after the European Union vote.
The unexpected move has led many to assume any potential cut in the base interest rate will not take place until August, when the MPC has a greater understanding of the economic impact of Brexit. A lower interest rate hurts a currency’s foreign-exchange value, but a stronger pound is bad for United Kingdom exporters.
The minutes from the bank’s policy-setting meeting on Wednesday provided two possible explanations for the committee’s decision to hold rates in July.
“Few hard data covering the post-referendum period has yet been released and very little survey evidence was available so far …”
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The Bank warned that it expects “sizable falls” in commercial property values in the coming months and also revised down the outlook for house prices.
