The Bank of England (BoE) has left interest rates steady at their 48-year low of 3.75 per cent for the third month running.
Market analysts had been split on whether the BoE would cut this month, with a Reuters poll this week putting the chances of a reduction at 51 per cent.
Many economists had expected that the pound's sharp fall - it hit a six-year trade-weighted low yesterday - would stay the central bank's hand as it prepared its quarterly inflation forecasts for next week.
But others said that weaker growth prospects meant the bank's nine-strong Monetary Policy Committee would take action immediately. The BoE last cut rates in February by a quarter-point, a decision that took markets by surprise.