The Bank of England today cut its growth forecast for Britain's economy to zero in the second quarter of 2019 and highlighted risks from global trade tensions and growing fears of a no-deal Brexit. 

Bank of England officials voted unanimously to hold interest rates at 0.75%, despite some recent suggestions from a couple of policymakers that borrowing costs should go up sooner rather than later.

The central bank stuck to its message that rates would need to rise in a limited and gradual fashion, assuming Britain can avoid a damaging no-deal Brexit. 

But the Bank of England noted a darkening outlook for the world economy which prompted the European Central Bank, US Federal Reserve and Bank of Japan to signal this week that more stimulus could be on the way. 

"Globally, trade tensions have intensified. Domestically, the perceived likelihood of a no-deal Brexit has risen," the Bank of England said in its policy statement. 

The bank also highlighted a growing disconnect between the "smooth" Brexit that underpins its forecasts and the market pricing in a much more chaotic exit from the EU that would hurt Britain's economy and probably mean rate cuts.

The Bank of England said Britain's economy is now on track to stagnate in the second quarter, rather than grow 0.2% quarter-on-quarter as it predicted last month. 

It pointed to the likely hangover from rapid stockpiling by companies earlier this year as they scrambled to prepare for the original Brexit deadline in March. 

But despite the gloomier outlook for the April-June period, the Bank of England still expects the British economy to grow in 2019. 

But a damaging no-deal Brexit would lead to a big change in the message from the Monetary Policy Committee. 

Former foreign secretary Boris Johnson is the front-runner in the race to succeed Prime Minister Theresa May. 

He and other contenders have said they are prepared to lead Britain out of the European Union without a deal, if necessary.

The Bank of England said financial conditions in Britain had loosened since May, which mechanically would feed through into stronger forecasts for economic growth, excess demand and inflation. 

But it highlighted a mixed picture for inflation pressures. There are increasing signs that wage growth is levelling off, the BoE said, although the labour market remained tight.