The bank's Quarterly Inflation report, released on Thursday, warned that Brexit was having a clear negative impact on the United Kingdom economy, saying that since the last Inflation Report, in November: "The further intensification of Brexit uncertainties, coupled with the slowing global economy, had weighed on the near-term outlook for United Kingdom growth".
The BoE also slashed its forecast for 2020 United Kingdom growth - to 1.5 per cent from 1.7 per cent.
The Bank of England lowered the United Kingdom growth forecast due to Brexit uncertainties as businesses are holding back the investment.
The economy isn't ready for a no-deal, no-transition Brexit, Carney said, adding that the probability of such an outcome has increased.
This slowdown mainly reflects softer activity overseas and the greater effects from Brexit uncertainties at home, ' the Bank's policymakers said after voting unanimously to keep interest rates unchanged at 0.75%.
Carney said that the possibility of a "no-deal" Brexit has gone up since the aftermath of the Brexit vote in 2016, when it was considered unlikely. A clarification from the central bank is awaited.
Financial markets have cut almost one full quarter point rate rise over the next two years since the last inflation report in November, factoring in just a 50/50 chance of one hike in 2019.
The cut in borrowing costs in Asia's third-biggest economy comes as the economy stutters and other central banks, most notably the Federal Reserve, have sounded increasingly cautious about the global outlook.
The BoE saw a fall this year in business investment and housebuilding, which have been weak in the run-up to Brexit, as well as a halving of the growth rate in exports, reflecting the global slowdown.
With Brexit uncertainty wreaking havoc on the economy, that will be the lowest annual rate of growth since 2009.
The Bank said growth was likely to have halved to 0.3% in the fourth quarter of 2018, down from 0.6% in the previous three months and estimated it will fall again to 0.2% in the first quarter and second quarters of 2019.
Although it did hold out the hope of a recovery later this year if an orderly deal is negotiated by the March deadline.
In its accompanying quarterly inflation report, the Bank outlined the volatility of its forecasts depending on the outcome of Brexit negotiations.
Most economists polled by Reuters expect interest rates to rise later this year if Brexit goes smoothly.
Mr Carney said a rapid easing of uncertainty could potentially boost growth by around 0.5 percentage points a year over the next three years.
"Given core-inflation is already quite high, we see headline inflation rising sharply towards the end of the year". If the consensus is realised it would mark the sixth month in a row where inflation was below the RBI's medium-term target of 4 percent.