BANK of England policy makers voted unanimously to keep interest rates on hold this month for the first time since July amid concerns about low inflation, minutes of their latest meeting revealed.

Two members of the Monetary Policy Committee (MPC) abandoned their arguments for lifting the Bank rate by 0.25 per cent after voting five times to do so since last summer.

The Bank judged that there was a "roughly even chance" that inflation would dip below zero during the first half of this year.

Sterling fell as the disclosure from the MPC's meeting earlier this month appeared to push back further the timing of any interest rate hike with experts already expecting a rise would not take place until late this year or the start of next.

Interest rates have been on hold at the historic low of 0.5 per cent for nearly six years and speculation over the last year about the timing of a rise nearing has been pushed back amid worries about the global economy and low inflation.

The MPC minutes recorded that the decision on holding interest rates was "finely balanced" for Ian McCafferty and Martin Weale, the two members who had previously been voting for a hike.

They still argued the sharp fall in inflation was largely driven by temporary factors - and believed it was unlikely to plunge into a "self-perpetuating" spiral - while noting that wage growth looked buoyant.

"Nevertheless they noted the risk that low inflation might persist for longer than the temporary factors implied and concluded that this risk would be increased by an increase in Bank rate at the current juncture," the minutes said.

The Consumer Price Index (CPI) rate of inflation fell to a joint record low of 0.5 per cent in December as the sharp fall in oil prices and the supermarket price war keep a lid on increases in the cost of living.

It means CPI is more than 1 per cent off the Bank's 2 per cent target for CPI, triggering a letter which must be written by governor Mark Carney to Chancellor George Osborne with an explanation.

While subdued prices are welcome for households, inflation being too low threatens the risk of a damaging deflationary spiral in which consumers put off purchases and firms put off investment in the belief that prices will fall.

The Bank expects inflation to bottom out at close to zero in March, the minutes revealed, after the sharp plunge in the price of a barrel of Brent crude to below 50 US dollars. Oil has fallen by more than half since last summer.

CPI has already dipped below zero in the eurozone and the European Central Bank is widely expected to unleash a bout of money-printing or quantitative easing tomorrow in a bid to revive the moribund economy.

Fears about Europe were among the factors that risked keeping inflation persistently low in the UK, according to the MPC minutes.

They also cited the risk that low inflation could weaken wage growth because it is expected to reach a low point at a time when a large proportion of pay settlements were being made, feeding into further downward pressure on CPI.

But the minutes also said the impact of falling oil prices was likely to be temporary if they stabilised or rose as expected, while there had been signs of a pick-up in pay growth.

They said the near-term weakness in CPI could be followed by a sharp bounce-back as low oil prices and interest rates fed through to a boost in consumer demand.

"It was possible that the risks to CPI inflation in the medium term might have, if anything, shifted to the upside, but all members were alert to the downside risk of current low inflation becoming entrenched."

Ben Brettell, senior economist at Hargreaves Lansdown stockbrokers, said the minutes marked "a significant shift in the expected path for interest rates".

He said: "Many forecasters had been expecting the first rise to come later this year, but this now looks extremely unlikely."

Chris Williamson, chief economist at Markit, said: "There's still an outside chance for rates to rise later this year.

"But it would require wage growth to continue to revive and for policymakers to see clear evidence that falling oil prices are driving a substantial upturn in consumer spending, as well as a significant improvement in the eurozone economy.

"The catalyst for the latter may come tomorrow, in the form of more aggressive stimulus by the ECB as it looks set to announce full-scale quantitative easing.

"However, even if QE works, it will take time for the euro area economy to show signs of healing. UK rate rises before 2016 are therefore only a remote possibility."