The decision, which left the Bank's base rate at 5.5%, had been widely expected, although economists have warned another rise may happen next month.

Families with a typical £100,000 home loan have seen their monthly repayments increase by £63.79 after four interest rate hikes since last August.

The Bank's Monetary Policy Committee (MPC) sanctioned the increases as part of its battle to curb inflation in the face of a strong global economy, higher energy prices, rising house prices and buoyant consumer spending.

The CPI measure of inflation breached its target range to reach 3.1% in March, although it retreated to 2.8% in April. The Bank indicated last month that it may need another hike in order to keep the consumer prices measure of inflation on track for 2%.

There have been signs that the rate hikes are beginning to slow consumer spending and the housing market. Mortgage approvals fell to their lowest level in 12 months during April, while figures from the British Retail Consortium showed a fall in like-for-like sales in May as shoppers were put off by wet weather and previous rate rises.

CBI chief economic adviser Ian McCafferty said: "By leaving rates on hold this month, the Bank has resisted rushing into a rate rise that, though widely expected, may still prove unnecessary."

Institute of Directors senior economist Peter Patterson, described Thuersday's decision as a "temporary reprieve". He said: "Underlying inflationary pressures are rising, and firms are regaining pricing power. We must hope that the MPC does not look back and regret the failure to act. If it gets too far behind the curve, interest rates could end up going higher still and for longer."

The Bank's committee is still concerned over pricing confidence among manufacturers, prospects for energy and import prices and the degree of spare capacity in the economy. Last month members even considered a 0.5% rate hike before unanimously agreeing a smaller 0.25% rise.

The committee said volatile movements in oil and metals prices made it more difficult to predict medium-term inflation prospects.