UK interest rates has been kept at their historic low of 0.5% as mounting pressure to cool the housing market failed to persuade the Bank of England to change course. 

The announcement was widely expected as policymakers have said they would rather utilise other tools to curb any property bubble before acting on rates, which would only be deployed as a "last line of defence". 

UK rates have been at the historic low of 0.5% for more than five years to nurse the economy back to health, with a recent period of falling inflation easing pressure on its monetary policy committee (MPC) to act.

With the recovery gathering pace, policymakers have made clear they want to see more of the "spare capacity" in the economy taken up before any hike, leading to expectations of a first rise next spring.

But signs of accelerating growth, including UK survey data earlier this week, have added to speculation that they might have to go up this year to cool inflationary pressures likely to lie ahead.

The bank will update its forecasts for gross domestic product (GDP) growth and inflation at its quarterly inflation report next week.

Meanwhile, the Organisation for Economic Co-operation and Development (OECD) has hiked its UK growth forecast to 3.2% and sounded a warning that action may be needed to cool the housing market.

The international body called for action to restrain demand to contain levels of household debt. 

Last week, Bank of England deputy governor Jon Cunliffe warned that the surging property market could pose the biggest danger to the country's financial stability. 

The bank has already tried to put the brakes on by withdrawing the Funding for Lending scheme, which widened access to mortgages last year by giving lenders access to cheap finance. It has been redirected purely to business loans.

Another measure has seen a new power created to be able to vary the affordability criteria that borrowers must meet, to ensure that they can afford to service mortgages if interest rates rise.

The European Central Bank also kept euro zone interest rates steady at record lows of 0.25% today, but signalled it may cut them next month depending on new euro zone inflation forecasts.