U.K. 10-year gilt yields fell to a day's low of 0.809% following the decision. The FTSE 100 extended gains, trading 0.5% higher during the afternoon session.

BOE officials had previously talked of the need for higher borrowing costs in the not-too-distant future, but Governor Mark Carney announced that the central bank's Monetary Policy Committee (MPC) had voted unanimously to hold rates at 0.75%.

Sterling extended its losses against the euro in reaction to the news, falling 0.4% to 89.09 pence, while also falling from 1.2723 to 1.2694 against the dollar .

The central bank also cut its growth forecast for Britain's economy to zero in the second quarter of 2019, highlighting global trade risks and growing fears of a damaging no-deal Brexit.

The Bank of England held interest rates steady on Thursday amid the possibility of a no-deal Brexit still hanging over the U.K.

The Bank of England on the day after the Brexit vote on June 24, 2016.

The BOE stuck to its message that rates would need to rise in a limited and gradual fashion, assuming Britain can avoid leaving the European Union without a deal on October 31.

The decision indicated that the BOE is not planning to reverse direction in accordance with other major central banks, which have set a more dovish tone this week. At the May second-quarter Inflation Report meeting, Carney suggested that markets were underpricing the central bank's rate trajectory, insisting that the next move would be up.

On Tuesday, European Central Bank President Mario Draghi indicated that more stimulus may be added to the euro zone, while the U.S. Federal Reserve on Wednesday held rates stable, but opened the door to a future rate cut.

Britain's modest rate of underlying inflation is also helping the BoE to hold off on fresh interest rate hikes while it waits for the outcome of the Brexit impasse, although some officials in recent weeks have said increases may be needed sooner rather than later.

U.K. economic data published Wednesday showed the country's inflation rate cooling in May, with cost pressures in factories falling to a three-year low. Consumer prices rose to an annual rate of 2% in May, matching expectations.

BOE Chief Economist Andy Haldane said earlier this month that the time for a rate rise to mitigate inflation pressure was nearing, while MPC member Michael Saunders said Brexit uncertainty was not a reason to delay tighter policy indefinitely.

The ECB and Fed tilt this week had offered the pound some respite. The British currency rose for a second straight day on Wednesday, having previously fallen 5% since early May amid growing concern that Boris Johnson, the favorite to succeed Prime Minister Theresa May, would lead the U.K. out of the European Union with or without a deal on October 31.