It said the United Kingdom economy was expected to grow by 1.3 per cent this year, down from a previous projection of 1.5 per cent in May.
".We think a gradual and limited increase in interest rates over the next few years is likely to be needed to keep inflation at our 2% target", the BoE said in its 'Visual summary - Inflation Report August 2019'.
"Whatever Mark Carney says should be taken with a massive pinch of salt as most of his past predictions have been proved to be incorrect".
A day after the US Federal Reserve reduced rates for the first time since the global financial crisis, the BoE said it still expected to raise borrowing costs gradually - though this now hinged on a global pick-up as well as a "smooth" Brexit.
Food and petrol will become more expensive overnight and the pound will fall in what he describes as a "real economic shock" if we leave the European Union without an agreement.
Bank of England governor Mark Carney on Friday (Aug 2) warned that a no-deal Brexit would be a shock for Britain, causing supply disruption and potentially undermining entire sectors of the economy such as the vehicle industry and farming.
Newly elected Prime Minister Boris Johnson said last week he would deliver Brexit by October 31 "come what may".
Most economists think that a no-deal Brexit would plunge the British economy into recession as firms struggle to cope with the subsequent imposition of tariffs on traded goods.
Month-on-month figures also improved, rising from -0.6 percent to 1.1 percent, and providing further uplift for the euro today.
"There are some very big industries in this country where that which is highly profitable becomes not profitable, becomes uneconomic, and very hard decisions will need to be taken". He says that while businesses can prepare for no-deal, those preparations cannot "eliminate adjustments that moving to a new trading relationship would entail".
"Profound uncertainties over the future of the global trading system and the form that Brexit will take are weighing on United Kingdom economic performance", BoE Governor Mark Carney said.
"Whatever outcome the country chooses it is always preferable to have a transition to it".