The Bank of England has warned that Brexit will weaken incomes for years as new UK data suggests firms are already holding back on investment.
In its latest assessment of the U.K. economy, the Bank of England (BOE) kept interest rates on hold and warned that a squeeze on households could intensify with inflation set to rise higher in the short term than previously forecast.
In its latest monetary policy statement, the BOE warned it could do little to offset the negative effect of Brexit.
"Monetary policy cannot prevent either the necessary real adjustment as the United Kingdom moves towards its new international trading arrangements or the weaker real income growth that is likely to accompany that adjustment over the next few years," the statement read.
Official figures released Thursday showed a big miss for industrial production in the United Kingdom during March, as growth in the sector weakened for the third consecutive month.
The data drop showed U.K. construction, industrial production and manufacturing numbers for March all missed estimates.
Sterling fell on the news and subsequently extended falls after the BOE voted 7-1 to maintain interest rates at 0.25 percent.