Its rate-setting committee cut interest rates for the first time in nearly seven and a half years, from 0.5 percent to 0.25 percent, and signaled a further rate cut before the end of the year. This is likely to be "close to but a little above zero", according to the committee's minutes.
"I cannot see any scenario where I would consider negative interest rates," Carney told CNBC at a press conference after the announcement. He also dismissed so-called helicopter money, where the population is effectively handed out money, as "flights of fancy".
Carney, who had been criticized for his forecasts about how Brexit could negatively hit the U.K. ahead of the referendum, said that the "early indicators are consistent" with his warnings. He added that the big decisions on how to deal with the economic impact remain with the new Chancellor, Philip Hammond, and the rest of the U.K. government.
Sterling fell sharply against the dollar after the announcement and hit 1.3140 at around 12:30 p.m. London time. British gilt yields also hit record lows.
Negative interest rates, which have been employed by their counterparts elsewhere in Europe, have increasingly being mentioned as a possible policy option for the U.K.
During the fallout from the U.K.'s vote to leave the EU in June, there have been concerns about how much the bank can do to halt a slowdown, given that it has already gone through close to a decade of extraordinary monetary policy measures.
In an effort to stave off some of the potentially worse impacts of very low or negative interest rates, Carney announced a new Term Funding Scheme worth up to £100 billion ($132 billion) and the purchase of up to £10 billion in U.K. corporate bonds.
A £60 billion hike in the bank's government bond-buying program, known as quantitative easing, to £435 billion was also announced.