In the press conference following the Bank of England’s monetary decision, Governor Mark Carney explained that he bad weather was behind the first-quarter’s slowdown to 0.1 percent.
Growth and inflation has been revised down from February as the economy was hit hard by the snowy and icy weather in the first three months, Carney said.
But that will be temporary as labor market remained strong and unemployment at the lowest level in four years.
The negative impact from Brexit on business investment has remained but has not intensified, Carney revealed.
Consumption will pick up as the real income squeeze comes to an end, but the BOE believes that consumption will only expand half as fast as before the EU referendum, and just a third as fast as before the financial crisis.
Later in the year, the Brexit path should be clearer as both Britain and EU should reach a deal.
governor Ben Broadbent said that markets now predict there is an 85 percent
chance of a rate increase by November 2018.