Bank of England Governor Mark Carney said investors were underestimating how much the bank could raise interest rates even as it kept borrowing costs on hold today due to Brexit uncertainty. 

The Bank of England said there was little immediate risk from waiting for a clearer view of what Britain's departure from the European Union would mean for the economy.

All nine of its rate-setters all voted to keep its benchmark rate at 0.75% today.

But Mark Carney made clear his view that investors were too relaxed about the pace at which the Bank of England could resume its gradual rate increases to ease Britain off the stimulus of low borrowing costs that has been in place for more than a decade. 

"There are insufficient hikes in the current market curve to be consistent with our remit," he told reporters. 

The Bank of England's position that higher borrowing costs will be needed in future represents a more hawkish stance than either the US Federal Reserve or the European Central Bank. 

The bank upgraded its forecast for growth in the world's fifth-largest economy to 1.5%, up from the decade-low 1.2% it predicted in February, largely reflecting better global economic prospects. 

"The underlying path of GDP growth appears to be slightly stronger than previously anticipated, but marginally below potential," the Bank of England said.

During the first quarter of 2019 the UK economy probably grew by 0.5% due to businesses building up stocks ahead of Brexit, the Bank of England said - a faster rate than the 0.2% growth it forecast in February. 

However, the central bank expects growth to slow to 0.2% during the current quarter. 

Britain's departure from the EU, originally due for March 29, was delayed last month until October 31, unless parliament approves a deal sooner. 

This removes the immediate risk of a disruptive, no-deal Brexit which hung over the Bank of England at its last meeting in March, but extends a period of economic uncertainty.

The Bank of England said this made some economic data, such as business surveys, harder than normal to interpret. 

"More generally, there remained mixed signals from indicators of domestically generated inflation and the cost of waiting for further information was relatively low," the bank said, adding it continued to assume Brexit would go smoothly. 

British inflation is currently just below its 2% target, but unemployment is at its lowest in more than 40 years while wages are rising at their fastest rate in a decade.

Before today's decision, financial markets saw only a 35% chance of a rise this year. 

The Bank of England has raised interest rates only twice since the 2008 financial crisis, in November 2017 and August last year. 

"The Committee continues to judge that an ongoing tightening of monetary policy over the forecast period, at a gradual pace and to a limited extent, would be appropriate," the Bank of England said, echoing earlier language. 

Its tightening stance contrasts with the position of the US Federal Reserve, which last night said it saw no case for moving rates in either direction, and faces pressure to lower interest rates from President Donald Trump. 

Updated Bank of England forecasts show the central bank expects inflation - currently 1.9% - to exceed its 2% target in two and three years' time, by a similar margin to what it predicted in February. 

The forecasts are based on financial market pricing which assumed Bank of England interest rates would not reach 1% until late 2021 - around 15 basis points less in tightening than was priced in just before February's meeting. 

The Bank of England said that after three years, the economy would be overheating to a greater extent than it forecast in February if interest rates only rose to 1%, and that inflation would be higher if sterling had not recently strengthened. 

It also cut its forecast for unemployment sharply to 3.7% in two years' time, down from 4.1% in February, reflecting businesses' preference to hire staff, rather than make long-term investments, at a time of economic uncertainty.