The Bank of England's rate-setting committee has voted to leave interest rates unchanged at 4.5%.
The decision had been widely expected after official figures showed inflation rose to eight-year highs in September.
Analysts also cited a recent pick-up in retail sales, as well as signs of a revival in the house market, as reasons for the Bank to leave rates on hold.
But the move disappointed business leaders who have been calling for a cut to give manufacturers a boost.
The British Chamber of Commerce warned that the Bank's current caution could lead to major risks for the economy.
"British business is disappointed that the MPC felt unable to act more boldly to counter the worsening economic circumstances and the sharp slowdown in the pace of economic activity," BCC director general David Frost said.
Official figures last week showed that manufacturing output went into reverse in September falling by 0.3% from a month earlier.
High Street stores had also been hoping for a cut in rates after figures from the British Retail Consortium (BRC) showed like-for-like sales fell for a seventh consecutive month in October.
"We did not expect any change in interest rates today from the Bank of England, although clearly a further reduction in the run-up to Christmas would have been helpful to both retailers and industry in general," BRC director general Kevin Hawkins said.
Allsports is one of the latest victims of the consumer slowdown
In recent months a number of companies - such as sports retailer Allsports, furniture group Durham Pine - have been forced to call in the administrators blaming rising costs and falling sales as consumers keep a tight rein on their finances.
"The Bank continues to walk the tightrope between the outlook for inflation remaining above target and an uncertain growth picture," Emily Earl, senior economist at the Engineering Employers Federation (EEF) said.
"Whilst the decision remains finely balanced, the MPC is right to stick to its steady approach for the time being."
The Bank has now kept rates unchanged for three months in a row.
Most economists now believe that rates will be kept on hold until next year, but they are divided on when the Bank will make another move - and what direction it would take.
Deutsche Bank economist George Buckley added that next week's inflation report would provide more hints on the future path for interest rates.
"Potential downward revisions to their end-period forecasts for inflation and growth could help set the stage for another cut, possibly as early as the first quarter of next year," he said.
The MPC last shifted base rates in August, moving them down a quarter point to stimulate economic growth.
However, other experts have warned that surging inflation and "increasingly hawkish" updates from the MPC have seen opinion move toward the belief that rates could rise.
"As the data continue to firm and upside risks to inflation build, we believe the MPC will adjust interest rates higher in the New Year," said Alan Clarke, economist at BNP Paribas.