Investing.com - Minutes from the Bank of England’s (BoE) policy meeting showed that all nine members of the monetary policy committee (MPC) were in favor of leaving the key interest rate at a record low of 0.5%, but a separate report showed that the British central bank held a gloomier outlook on the U.K.'s economy and warned of further economic damage if the country decided to leave the European Union (EU).
The BOE said it was holding the benchmark interest rate at 0.50%, in a widely expected move. The rate has been held at that record-low level since March 2009.
The central bank also said it was to maintain the stock of asset purchases financed by the issuance of central bank reserves at £375 billion.
All nine MPC members also were in favor of making no changes to the central bank's £375 billion asset-purchase program.
In the minutes, the BoE explained that inflation remained well below the 2% target.
"This shortfall is due predominantly to unusually large drags from energy and food prices, which are expected to fade over the next year,," the BoE said.
"Core inflation also remains subdued, largely as a result of weak global price pressures, the past appreciation of sterling and restrained domestic cost growth," the bank added.
The minutes also noted expectations for a further deceleration in the second quarter.
BoE cuts growth forecasts; warns on Brexit
In the separately released inflation report, the BoE cut its growth forecast for the second quarter to 0.3%, compared to the prior estimate of a 0.5% expansion.
For 2016, the central bank lowered its estimate for growth to 2.0%, from the prior 2.2%.
In the minutes, the BoE warned on the danger arising from a Brexit if the U.K. votes to leave the EU in the June 23 referendum, saying that "the May projection is conditioned on a path for bank rate implied by market rates and on continued UK membership of the European Union, including an assumption for the exchange rate consistent with that".
"Whatever the outcome of the referendum and its consequences, the MPC will take whatever action is needed to ensure that inflation expectations remain well anchored and inflation returns to the target over the appropriate horizon," the BoE promised.
BoE governor Mark Carney will hold a press conference on the inflation report at 11:30AM GMTT, or 7:30AM ET.
After these releases, GBP/USD was trading at 1.4473 from around 1.4462 ahead of the announcement, while EUR/GBP was at 0.7872 from 0.7876 earlier.
Meanwhile, European stock markets traded higher. London’s FTSE 100 rose 0.41%, the EURO STOXX 50 increased 1.02%, France's CAC 40 advanced 0.85%, while Germany's DAX gained 0.93%.