Bank of England holds interest rate steady, uneasy of Brexit

The Bank of England (BoE) said on Thursday it would keep its main interest rate at 0.50 percent amid concerns about the country's economy ahead of a referendum on Britain's membership in the European Union (EU).

While keeping the interest rate unchanged, the British central bank also issued an unprecedented warning that the UK economy could endure "materially lower growth...notably higher inflation" and "rises in unemployment" if Britain voted to leave the EU next month.

In its quarterly economic report, the bank said the British pound could fall "perhaps sharply" if there were a "Leave" vote.

It blamed half of the existing 9.0 percent fall in the value of the pound since November on a referendum effect.

The report also noted that the referendum itself was already negatively affecting growth as the forecast for the current quarter was lowered from 0.5 percent to 0.3 percent, the slowest growth since the eurozone crisis.

The statements about Brexit were a rare move for the BoE as it has never before detailed the risks of a political event in this way. According to local media reports, this is the bank's most extraordinary intervention in a political event since it was granted by the government operational independence in 1997.

Britain will hold the EU referendum on June 23, with polls currently showing that the public is almost evenly divided as to whether to remain in or leave the European Union. Enditem