Bank of England Bets on Smooth Brexit

The Bank of England forecast steady if unspectacular growth for the U.K. in the years ahead--provided the country's exit from the European Union goes smoothly.

In its latest set of economic forecasts, the central bank estimated that annual growth in the U.K. would increase slightly to 1.9% in 2017, as a pickup in exports and business investment helped offset a squeeze on consumer spending from rising prices.

Officials held the central bank's benchmark interest rate steady and signaled they were in no rush to raise borrowing costs from record lows, despite above-target inflation. They did say, though, that interest rates might need to rise more quickly than the glacial pace expected by investors, who doubt the central bank will move until well into 2019.

Write to Jason Douglas at jason.douglas@wsj.com and Paul Hannon at paul.hannon@wsj.com