LONDON -- The Bank of England (BoE) has voted to hold its benchmark interest rate at 5.25 percent, the United Kingdom's (UK) central bank said in a statement on Thursday.

At its meeting ending on Wednesday, the BoE's Monetary Policy Committee (MPC) voted by a majority of 8-1 to leave the rate on hold. One member preferred to reduce the rate by 0.25 percentage points to 5 percent.

Having declined through the second half of last year, the UK economy and market sector output are expected to grow again during the first half of this year, the BoE said in a statement.

The bank projected inflation to fall slightly below the 2 percent target in the second quarter.

The latest data showed that UK inflation fell to 3.4 percent in February from 4 percent in January and December. The bank noted that the service inflation remained "elevated" at 6.1 percent in February.

"The labor market has continued to loosen but remains relatively tight by historical standards," the BoE added.

The bank said that the MPC will continue to monitor closely indications of persistent inflationary pressures and resilience in the economy as a whole, and will keep under review how long the bank rate should be maintained at its current level.