The Bank of England held interest rates steady at 5 percent Thursday, as widely expected, as opposing concerns of rising inflation and slowing economic growth left policy makers without clear direction.
The result matches the prediction of all of the 76 analysts polled by Reuters last week, who said the central bank's Monetary Policy Committee would stand pat for the fourth month running.
The same analysts expect cuts next year to revive the economy once inflation starts coming down towards the 2 percent target.
"It will be the middle of next year (that rate cuts start), remember they're still waiting for inflation to peak," Tom Vosa, head of market economics for Europe at nabCapital, told "Power Lunch Europe."
"The labor market is essentially the key … in this cycle it has certainly eased far more rapidly than in the past," Vosa added.
Monetary Policy Committee members are finding it hard to make up their minds, minutes of their meeting last month revealed, and rate-setting members described the decision as "difficult."
Inflation is currently well above the BoE's stated 2 percent target and price data for July, which the central bank had an early indication of, could show the CPI rate exceeding 4 percent.
The economic news, however, has been unrelentingly gloomy and many say Britain could soon slip into its first recession since the early 1990s when hundreds of thousands lost their jobs and homes.
MPC member Tim Besley wanted to raise rates last month, the minutes showed, as he is concerned that with inflation possibly poised to touch or exceed 5 percent, the central bank needs to send out a strong signal to maintain credibility.
Just as dovish as Besley is hawkish, David Blanchflower wanted to cut rates last month as his reading of the data tells him the economy is heading into a deep and painful recession.
House prices are sliding even faster than they were then. Data from Britain's biggest mortgage lender on Thursday showed house prices down a record 10.9 percent on the year in July.
The property downturn is battering consumer confidence and taking its toll on the wider economy as homebuilders cut thousands of jobs and household goods sales dive.
The European Central Bank, which is also expected to hold rates steady on Thursday, has already raised interest rates once this year because of worries about inflation which is affecting economies all around the world.
Inflation in Britain is running at nearly twice the central bank's target and could soon hit 5 percent as utility companies have raised their tariffs by up to 30 percent.
Economists are now waiting for the BoE's new forecasts next week to see where the central bank thinks inflation will be in two years' time for a clearer idea of the next move in rates.
- Reuters contributed to this report