The hold marks 14 months since rates were cut at the start of the Coronavirus pandemic.

The Bank said that the UK economy is set to enjoy its strongest growth in over 70 years as Coronavirus pandemic restrictions are lifted. They have forecast that the economy will expand by up to 7.25% this year.

The Bank also added in the Monetary Policy Report that it expects the unemployment rate to peak at 5.5% later this year, below the 7.75% peak it predicted in February.

Laith Khalaf, financial analyst at AJ Bell, said that whilst the Bank has sharply upgraded economic forecasts for the UK, it shows how much uncertainty there is in their predictions.

He said: "The Bank of England is expecting a consumer spending spree to fuel an explosive economic recovery this year, funded by the war chest savers have built up throughout the pandemic. In February, the Bank predicted 5% of these excess savings would be spent, but that’s now been upgraded to 10%.

"The doubling in this forecast tells us there is a high degree of uncertainty in estimates of just how extravagant consumer spending is going to be. This is a unique situation, where consumers have been restrained by law and are now being gradually let off the leash, so even the best spreadsheets at the Bank of England aren’t going to nail this forecast with any precision. If consumers really let rip, the economy could be heading for a big boom. But if they play it safe, that will moderate the recovery."

Paul Craig, portfolio manager at Quilter Investors said it remains to be seen for how long the Bank of England can remain “super cautious with its monetary policy”.

He said: "It has done a stellar job in supporting the economy and financial markets through challenging waters, but consumers and investors must be prepared for the beginning of a tapering programme to reduce the scale of quantitative easing in-line with the vaccination roll-out and the economic reopening."