Bank of England downgrades United Kingdom growth forecast

While inflation, now at 2.3%, would likely peak at close to 3% in late 2017, the Bank said the pound's gain since the British General Election would help inflation ease back in 2018 and 2019.

The only member of the Monetary Policy Committee to vote for an increase in rates in the last MPC meeting before the 8 June national poll was, once again, the external member Kristin Forbes.

There were no surprises at the Bank of England's (BOE) 11 May decision to keep the Bank Rate where it was since August 2016, when it was lowered from 0.5% to 0.25% to contain the fallout from the "Brexit" vote of the previous month - a decision that's become supportive of the on-going resilience of the British economy to Brexit uncertainties.

At the same time, the Bank has revised up its inflation projections for 2017 from 2.7pc to 2.8pc.

The pound has been gaining over the last few days since the results of the French Election were revealed, rising to highs of €1.19238 to the pound yesterday. The BOE, however, trimmed its growth forecast for the current year.

The Pound was down against most major currencies following the bank's announcements.

"The slowdown appears to be concentrated in consumer-facing sectors, partly reflecting the impact of sterling's past depreciation on household income and spending", the Bank said in its report.

Officials cut their forecast for growth this year to 1.9 percent from 2 percent, though they raised it for the following two years and said expansion will remain around trend over the period. But what does it really mean for folks living on the other side of the Atlantic?

At that point, the OBR projected 2.6pc growth in average earnings this year and 2.4pc inflation. That will have repercussions for an economy that is highly reliant on consumer spending to drive growth. Together with the Bank's trimmed United Kingdom growth forecast and a release of weak industrial output data, that helped pull the pound below $1.28. Euro also remained under pressure against the Dollars for the third session in a row on the back of recent ECB dovish comments which added to the view that the Central Bank is in no rush to push interest rates higher or/and scale back its monetary stimulus. The unemployment rate remained at a 12-month low in the three months to February and the lead from the claimant count unemployment numbers suggests it should stay around this level in the near term - the BOE predicts the unemployment rate at 4.7% this year and the next. Importantly, they also note that monetary policy "could need to be tightened by a somewhat greater extent" than the path implied by markets. "We're relatively pessimistic, contrary to the view that these negotiations will evolve rather smoothly", she said. The MPC was short one member at this decision after Charlotte Hogg left the bank, having resigned after failing to disclose a potential conflict of interest.

GBP fell on the release of the report, hitting a low of 1.28820 after trading around 1.29240 pre-release.

Policymakers expect consumers to continue to feel the pinch over coming months but it noted that consumer confidence had held up reasonably well in surveys. Inflation, at the last reading, is running at 2.3%, while wage growth was just 2.2%.