The Bank of England scrapped plans to cut interest rates and said rates could move in either direction. The bank spoke as it ramped up its forecasts for growth and inflation in 2017 following the pound's slide after the Brexit vote in late June.

The BoE responded to the Brexit vote by cutting rates to a record low 0.25 percent in August and restarting its massive bond-buying program for the first time since 2012. 

The BOE on Thursday predicted less of a short-term impact. But it warned that Britain's access to EU markets could be materially reduced and hurt growth over a protracted period. The pound hit a 31-year low against the dollar last month.

The BoE said the effect of the pound's fall on inflation would prove temporary and attempts to offset that with tighter monetary policy would be excessively costly.