Proactive Investors - The Bank of England's monetary policy committee left rates unchanged at 5.0% at their September meeting, stating that the pace of future cuts is likely to be gradual.
Eight members of the committee voted to keep rates unchanged, with one vote for a cut, from external MPC member Dr Swati Dhingra. This was a swing from the 5-4 vote to cut in the previous meeting.
The MPC also voted to continue quantitative tightening at pace of £100 billion a year.
Governor Andrew Bailey said most members of the MPC think the Bank should be able to cut rates "gradually over time".
The statement from the MPC said that as well as voting 8-1 in favour of holding rates steady, the committee also voted unanimously to reduce the stock of UK government bond purchases held for monetary policy purposes.
The reduction will be by £100 billion over the next 12 months, which would reduce it to a total of £558 billion, which is the same as the pace over the past 12 months.
"In the absence of material developments, a gradual approach to removing policy restraint remains appropriate," the BoE committee said in its decision statement.
"Monetary policy will need to continue to remain restrictive for sufficiently long until the risks to inflation returning sustainably to the 2% target in the medium term have dissipated further."
It noted that since its previous meeting, oil prices fell back but CPI inflation was revealed to have remained at 2.2% in August, but is expected to increase to around 2.5% towards the end of this year - though this is due to the comparative period last year seeing lower energy prices.
Economist Paul Dales at Capital Economics's summary of the MPC decision is that the BoE "underlines that interest rates will be reduced gradually".
Markets are expecting two more 25-basis-point cuts from the BoE this year, but Dales expects only one, at the next meeting in November.
He said the most important change in the statement from the committee was the new line about the gradual approach to cutting rates, which he said contrasted with the US Federal Reserve’s jumbo 50bps rate cut last night.
This is because the BoE "has yet to shift from worrying less about inflation and worrying more about weak activity".
Rob Wood at Pantheon Macroeconomics said the decision "came with more hawkish guidance than expected" and he also forecasts just one more rate cut this year, in November, and three next year
He said the wording of the gradual approach for most members of the MPC "suggests a relatively high bar to cutting in consecutive monetary policy meetings, and to reducing Bank Rate by more than 25bp at a time".
He thinks services inflation and wage growth matching their forecasts by the time of the November meeting will be enough for the MPC to cut.
"We expect the MPC to then cut rates again in February, rather than moving in back-to-back meetings as the market prices."