The Bank of England considered the arguments for a cut in interest rates earlier this month before opting to keep the cost of borrowing on hold, it emerged today.
Members of the bank's Monetary Policy Committee (MPC) voted unanimously to
keep interest rates at a 38-year low of 4 per cent.
While the MPC admitted falling stock markets meant the case for a rate rise was "less urgent", today's report casts further doubt on the chances of another rate cut later this year.
The figure has been at 4 per cent for nine months in a row.
Minutes from the meeting held two weeks ago highlighted several factors that members suggested may have warranted a further cut.
They pointed to the fragile global recovery and the risk of continuing deflation of world goods prices.
However, the nine-member committee decided the arguments for keeping rates on hold were "more compelling", according to the minutes.
The MPC worried that a cut in rates risked denting confidence by implying that conditions were worse than the committee believed them to be.
A downward move also risked further stimulating the housing market, which had continued to see prices spiral despite the faltering economic recovery.
It added that two-year inflation projections suggested that a reduction in the cost of borrowing was not needed in order to meet the Government's 2.5 per cent target for underlying inflation.
At the time of the meeting the rate was at an all-time low of 1.5 per cent but rose to two per cent following the release of new figures yesterday.
Falling stock markets were also a concern to the committee but it said it preferred to adopt a wait-and-see approach before deciding whether to act.