The Bank of England said Britain faces its weakest economic growth in a decade this year as uncertainty over Brexit mounts and the global economy slows, but interest rates will eventually rise if an EU divorce deal is done. While other major central banks have signalled they will hold off from raising borrowing costs, the BoE kept its message that gradual and limited rate rises lie ahead for Britain as long as, in just 50 days'' time, a no-deal Brexit is averted.

BoE Governor Mark Carney said "the fog of Brexit" was causing tensions in the economy and that the risk of an abrupt, damaging departure from the European Union was growing. "There are still as almost as a wide of range of possibilities as there were the morning after the referendum," Carney said after the Bank''s policymakers voted unanimously to keep rates at 0.75 percent, as expected.

Britain, the world''s fifth-biggest economy, is due to leave the bloc on March 29 but Prime Minister Theresa May wants more concessions from Brussels to rally her divided Conservative Party behind her exit plan, which parliament voted down last month. Carney told reporters "not everything may be tied up in a nice package" by Brexit day.

Copyright Reuters, 2019