The Bank cut its United Kingdom economic growth forecast for 2019 from 1.7% to 1.2%.
On Thursday, the Reserve Bank of India caught financial markets off-guard by reducing its key policy rate by 25 basis points to boost growth and as inflation has remained benign.
The global economy has continued to slow in recent months, reflecting a tightening in global financial conditions and the impact that trade tensions caused by Brexit and the strained relationship between U.S. and China, the BoE said.
Economic growth this year will plunge to its slowest pace since 2009 as the global slump combined with political chaos in the United Kingdom trashes business investment and encourages families to hold off big spending decisions.
"These decisions are in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of plus/minus 2 per cent, while supporting growth", RBI said.
Against the dollar, the pound had depreciated steadily in the hours leading up to the inflation report, from US$1.294, but the sharp rejection of sub-US$1.29 exchange rates indicates underlying short-term strength for Britain's currency.
Unless banking system liquidity rises, he said, "we are not seeing any substantial fall in lending rates across the board any time soon".
Officials said that potential supply growth is now a "little below" the 1.5 per cent previously estimated.
The Bank's latest rates decision comes just days after industry data showed output in Britain's dominant service sector nearly ground to a halt in January, reaching its lowest level for two-and-a-half years.
Some economists also felt that there was a danger that a largely independent central bank could come under government pressure - providing too much stimulus for the economy after last week's budget handouts.
Although it did hold out the hope of a recovery later this year if an orderly deal is negotiated by the March deadline.
The Bank's quarterly inflation report also signalled rates may not rise until the second half of 2020 as Brexit worries have seen businesses freeze spending, while it warned consumer confidence had "weakened significantly".
The move balances the downward correction of the inflation forecast with the "uncertainties and risks related to the inflation outlook stemming from the new set of fiscal and budgetary measures effective January 1, 2019".
Rajiv Kumar, vice chairman of government think-tank NITI Aayog, said the bank should act to help spur "higher growth rates".
It forecasts inflation - now at 2.1% - will fall below its 2% target for much of 2019, before picking up again due to domestic pressures, such as wage growth.