Sterling was down 0.5 per cent against the euro at €1.137 and 0.2 per cent against the dollar at $1.351 shortly after the BoE’s decision was revealed at midday on Thursday.
The Bank's Monetary Policy Committee, had been widely expected to keep its benchmark interest rate unchanged after a series of weak economic data.
The pound tends to rise when the cost of borrowing goes up and fall when it goes down.
Just weeks ago, markets were pricing in a 90 per cent likelihood that interest rates would rise above 0.5 per cent for the first time since the depths of the financial crisis in 2009.
But GDP grew by just 0.1 per cent in the first quarter of the year, worse than the expected 0.3 per cent and far below the pre-crisis growth levels.
Construction fared particularly badly, shrinking 2.3 per cent in March compared to a month earlier.
Extreme weather could have potentially contributed to the decline, though "it is difficult to quantify the exact impact on the industry", the Office for National Statistics said on Thursday
The ONS also revealed that manufacturing output also fell 0.1 per cent in March, a figure that could not be blamed on the weather to any significant extent.
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