In contrast to what the Office for National Statistics said when commenting on poor Q1 growth, the Bank is of the opinion that the current "soft patch" is due to the late and hard winter disruption caused by "The Beast from the East" in March.
Britain's economy grew more slowly than most of its peers previous year, after a Brexit-driven jump in inflation hit consumer spending power and some businesses delayed long-term investment.
The rate was further lowered by 25 basis points in the wake of the Brexit vote in the summer of 2016 and was raised back to 0.5 percent at the end of past year. BoE governor Mark Carney said: "The overall economic climate in the United Kingdom looks little changed thus far".
Confirming a glum first quarter for the economy, industrial output barely rose in March, data showed.
In February, Carney said rates might need to rise somewhat faster than markets had expected, given the country's long-term productivity problems.
That has roiled markets, first driving the pound to its highest since the June 2016 Brexit vote and then down sharply again.
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The UK benchmark index has been little changed in today's session, with investors digesting the Bank of England's (BoE) move to keep interest rates on hold, as well as a string of corporate releases. Surveys have suggested little rebound last month. The following month, two of the BoE's nine Monetary Policy Committee (MPC) members voted for an increase to 0.75 percent. Inflation fell faster than the BoE had expected and the economy grew at its slowest annual rate in five years in early 2018.
Tim Focas, director of financial services at Parliament Street says that caution is advised, but Mr Carney's position on Brexit remains questionable.
The outlook for the interest rate path in the United Kingdom after May Inflation Report from the Bank of England sees even lower than 90 percent chance for the bank to move in November. Higher interest rates exert downward pressure on inflation, and lower interest rates push it up. "At present, interest rate markets are attaching only a 50 percent probability to such an outcome", added Lloyds Bank.
However, the BoE may not be comfortable with this scaling-back of interest rate expectations, which has the potential to fuel inflation through a weaker pound and cheaper credit.
Alex Brandreth, deputy CIO at Brown Shipley, said: "While interest rates remain unchanged, it does look like policy direction is going to change in the near future and we believe a period of interest rate hikes lies ahead for the UK".
The second reason the central bank opted against another rate increase is that inflation has fallen more than anticipated.