The highly uncertain outlook for Britain's economy as the country prepares to leave the European Union means the Bank of England should keep interest rates on hold, one of the bank's top policymakers said on Monday.

Gertjan Vlieghe, one of the strongest advocates for Bank of England stimulus in the aftermath of June's Brexit vote, said upside or downside surprises in Britain's economy need not prompt automatic changes in British monetary policy.

In Vlieghe’s view, this tension between pessimistic market assessment, cautious businesses and upbeat households cannot last. It may be the case that financial markets are too pessimistic over the outlook or that households are too optimistic.

"For now, given our current economic outlook, and given the level of the exchange rate..., the best contribution that monetary policy can make to returning inflation to target while avoiding undesirable volatility in output growth is to keep interest rates where they are now," Vlieghe said in a speech at Sheffield University.

"We can tighten as much as we want but we can only ease a little bit further and, at least for me, that's an important consideration when thinking about how to set monetary policy in the future," he said after his speech.

He argues that “The suffering group would get a larger share of a shrinking pie. As monetary policy makers, we are trying to meet the inflation target by growing the pie in line with potential, and letting the government decide how to divide it up, using its fiscal and structural policy tools. Monetary policy cannot solve distributional issues, and should not be asked to try.”

Mr Vlieghe also stressed that many savers will have benefited from the stronger economy resulting from the monetary stimulus from the Bank in the wake of the global financial crisis, which has helped push the unemployment rate to below 5 per cent.

“Jobs and wage growth have benefited savers as well as borrowers,” he said.

“Once the effect of an improved economy on savers is taken into account, it seems to me that most savers benefit from monetary stimulus.”

The comments overall continue to suggest that Vlieghe will maintain his call for a very accommodative monetary policy. Market conditions remained very choppy on the wider dollar correction with the UK currency fractionally stronger after the comments with GBP/USD back above 1.2400. Gilts remained in positive territory on the day, slightly extending gains, while the FTSE pared losses as energy prices dominated.