The MPC voted against a cut, despite the threat of the UK falling into recession.
Interest rates have been held at five percent by the Bank of England.
The move comes after the Bank's nine-member Monetary Policy Committee (MPC) weighed up the conflicting economic pressures of rising inflation and a general economic slowdown.
GDP was static over April-June in the UK, and analysts including the International Monetary Fund predict that recession conditions will occur by the end of 2008. Under normal circumstances, this would result in a rate cut - with banks making loans cheaper and therefore encouraging spending.
However, inflation is also on the up, with the Consumer Price Index standing at a 16-year high of 4.4 percent. This provided the MPC with a dilemma, as bank rates are generally raised in times of high inflation.
It is not yet known how each member of the MPC voted, however, at the past two monthly meetings a three-way split in whether to raise, lower or keep rates as they were occurred - reflecting economists' uncertainty over what should be done.
The British Chambers of Commerce, a business group, has suggested that rates will be cut towards the end of the year - perhaps as early as next month - as inflation increases come to a head.
Speaking to the Press Association, the group's David Kern said: "The MPC…cannot ignore the mounting threats of falling UK house prices and worsening pressures on the global banking system. The economy urgently needs an interest rate cut to counter threats of recession."
