The downgrades, linked to Brexit, were enough for the majority of the Monetary Policy Committee to vote to keep official borrowing costs at their all-time low of 0.25 per cent, according to minutes from their meeting released on Thursday.
Furthermore, the Bank cut its annual GDP forecasts for 2017 and 2018 to 1.7% and 1.6% respectively from the previous 1.9% and 1.7%.
The Bank held the base rate by five to three in June but since then Kristin Forbes, who voted for a rate rise, has left and been replaced by Silvana Tenreyro.
"Brexit downside risks are larger than the MPC can formally acknowledge, which keeps the bar for a pre-2019 rate hike high, in our view", analysts at the bank said in a note to clients.
In the United States, the Federal Reserve is on course to raise short-term rates later this year, while the European Central Bank is to begin phasing out its huge bond-buying programme in 2018.
Under normal circumstances, faced with inflation above target and rising while unemployment is at its lowest level in over 40 years, the bank would already be raising interest rates.
The MPC's forecasts are based on the assumption of a smooth exit from the European Union with Carney arguing it is in both sides' interests to have a clear transition to "whatever the end state is".
Lukman Otunuga, research analyst at FXTM, also highlighted how with political uncertainty, soft economic fundamentals and ongoing Brexit concerns weighing heavily on the United Kingdom economy, investors may start to question whether the BoE moves forward with raising rates in 2018.
GBP/USD remains on the lower ground, around 1.3150.
The Bank said it saw GDP growth of 1.7 per cent this year, down from 1.9 per cent it projected in May.
"Of course, it could perhaps be that traders are only concerned with the near-term expectations of the BoE given its history of bad forecasts and the sheer amount of uncertainty in the economic outlook due to Brexit". Inflation, which will peak at about 3 per cent in October, will slow to around 2.2 per cent in 2020, just above the bank's 2 per cent target.
Policymakers agreed however to increase cheap lending for retail banks before the expiry of the Term Funding Scheme next February.
The latest Inflation Report from the Bank of England made for some glum reading for sterling bulls, although the weakening in the pound helped to propel the FTSE 100 to its highest level since 26 July.
The government sets the Bank an inflation target of 2% but the rate is now above that at 2.6%, with policymakers expecting it to pick up and peak around 3% in the autumn on the consumer prices index (CPI) measure.