The BoE's Monetary Policy Committee (MPC) voted 7-1 in favour of keeping interest rates on hold at their record low 0.25 per cent this month, as expected in a Reuters poll of economists.
"That means there will be an agreement about future trading arrangements and there will be a transition, or an implementation period, from the negotiation to that new agreement", said Carney.
"The weak pound since Britain's vote to leave the European Union has seen inflation surge in recent months with a weaker sterling pushing up the price of imported goods".
The Bank's two previous sets of quarterly forecasts brought big upward revisions to the growth outlook and on Thursday it only softened its short-term outlook a fraction, despite recent data showing that growth is now slowing sharply.
While inflation, now at 2.3 per cent, would likely remain above the 2 per cent target "throughout the next three years", the Bank said the pound's gain after the general election would help inflation ease back in 2018 and 2019.
And then, along with other officials, he's had to refrain from public speaking - aside from policy-specific communications - since the middle of last month until after the snap United Kingdom election in June. The bank will be publishing its meeting minutes and inflation report at the same time it makes the policy announcement.
Mr Carney said consumers were beginning to feel the pinch as the pound's plunge since the Brexit vote has pushed up prices.
But earlier today, the UK's Office for National Statistics said first-quarter growth in industrial production was weaker than it had previously estimated. Although no change in policy was expected, the release of poor economic data this morning which showed a widening trade deficit has been seen as confirmation of a slowdown by economists, validating the BoE's more cautious approach.
Speaking at a press conference following the announcement, Carney said the Bank was "tolerating" an overshoot in inflation now as it was the result of the exchange rate adjusting ahead of Brexit negotiations.
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But, if the Bank's more positive outlook towards the end of the three year forecast period comes to pass, the Monetary Policy Committee could move more rapidly towards interest rate rises than some expect.
These market assumptions were based on average prices in the two weeks to May 3.
The Pound Australian Dollar (GBP AUD) exchange rate tumbled this afternoon as the Bank of England (BoE) voted to leave interest rates on hold.
"These losses gained traction after the Bank of England unsurprisingly left rates unchanged with outgoing MPC member Kristin Forbes maintaining her call for a rise in rates, back to 0.5%", said Michael Hewson, chief market analyst at CMC Markets UK.
The BoE has already said that certain MPC members other than Forbes are ready to hike, saying in the minutes of its last meeting: "Some members noted that it would take relatively little further upside news on the prospects for activity or inflation for them to consider that a more immediate reduction in policy support might be warranted".
However, the Bank of England said it expected a pick-up in foreign trade and investment would offset a shortfall in domestic demand this year. In the final year of the forecast, however, the output gap closes and inflation rises slightly further above the target.
A general view shows the Bank of England in the City of London, Britain April 19, 2017.
"The forecast does rely heavily on a recovery of wages, a pick-up in wage growth".