Its shock downgrade compares with 1.7% predicted in November, while the Bank also cut its outlook for 2020 to 1.5%. "The report sends a clear message the BoE is unlikely to raise rates in the coming months", he said.
Financial markets have cut almost one full quarter point rate rise over the next two years since the last inflation report in November, factoring in just a 50/50 chance of one hike in 2019.
Business and farm leaders said they were also sceptical about the impact of the rate cut - and said it was the inability to borrow that was the biggest problem.
'A period of softer growth domestically and in the rest of the world was likely to be prove only temporary, ' the Bank said.
The RBI raised rates twice a year ago over concerns about rising prices but with inflation now at an 18-month low the bank said it was time to opt for a reduction.
The main reason the BoE thinks underlying inflation pressures will build is faster wage growth after Britain's unemployment rate hit its lowest level in more than 40 years.
"Eurozone stocks are suffering greatly as investors are fearful the region could be in for an economic downturn", CMC Markets analyst David Madden said.
But the currency rallied after governor Mark Carney said Brexit clarity would boost forecasts and a "robust but constructive" meeting between Theresa May and Jean-Claude Juncker in Brussels.
Government officials were quick to praise the RBI's move, while economists were more cautious, concerned that the monetary and fiscal stimulus would be inflationary.
Turkey building collapse death toll rises to three; 12 rescued
An eight-storey apartment building in Istanbul collapsed on Wednesday leaving at least two people dead, Turkish media reported. Authorities evacuated seven surrounding buildings , and one was under serious risk of collapse. "There were wails, screaming".
Ceferin reelected as UEFA President
Ceferin took over two and a half years ago after the corruption scandal that toppled his predecessor, Frenchman Michel Platini . The 51-year-old Ceferin was elected by acclamation as the only candidate standing at the 43rd UEFA congress in Rome.
The Bonfire of the Virginia Democratic Party, in GIFs
She says she was friends with Mr Fairfax while they studied at Duke University, but that they never had a romantic relationship. The upheaval began with the revelation last Friday that Northam's medical school yearbook page contained a racist photo.
The Best National Pizza Day Deals
Haley also told USA Today he expects "more restaurants" will begin offering Pancizzas in the week following National Pizza Day. Domino's is also running a contest on social media for National Pizza Day 2019, and the victor will get free pizza for a year.