The battered pound surged by more than 2% as the central bank held its bank rate at 0.5%, contrary to widespread expectations of a first cut in more than seven years.
Governor Mark Carney said two weeks ago that he expected the bank to give the economy more help over the summer.
The Bank of England has held its bank rate at 0.5% since March 2009, when the global financial crisis was hammering Britain and investors have spent much of the past three years speculating about when borrowing costs would rise as the economy picked up.
Now the question investors and businesses are asking is whether Britain can avoid falling back into recession.
But the Bank of England’s rate-setters said yesterday they would wait three more weeks to see the intensity of the Brexit hit to Britain’s economy before deciding on the need for any stimulus.
“In the absence of a further worsening in the trade-off between supporting growth and returning inflation to target on a sustainable basis, most members of the committee expect monetary policy to be loosened in August,” minutes of the meeting said.
“The precise size and nature of any stimulatory measures will be determined” in August, it said.
Against the euro, sterling rose to 83.26 pence, but remains sharply lower from the 76.53p on the eve of the June 23 vote. Irish exporters into Britain tend to suffer when sterling drops against the euro.
In Dublin, Mazars managing partner Mark Kennedy said the Government needs to focus on the Irish industries, including agri-food, drink, tourism, transport and financial services which are worst affected by the slump in sterling.
He said the UK would unlikely cut its corporation tax soon.
John McGrane, director general at the British Irish Chamber of Commerce, said the many pharmaceutical companies based here meant that the industry should lobby for the the European Medicines Agency to be relocated here out of London, as the UK leaves the EU.
Chris Williamson, chief economist with data firm Markit, said the bank had opted not to rush into “a knee-jerk reaction” to the Brexit vote but it would “need to do a lot more to shore up confidence and keep the gears of the economy turning.”
British share prices lost some of their earlier gains and housebuilders such as Berkeley and Barratt Developments turned negative.
Some economists complained that Mr Carney had given them a wrong steer when he said in a speech on June 30 that he thought more stimulus would be needed soon.
Alan Clarke, at Scotiabank, said Mr Carney built up expectations for a July rate cut, echoing other premature signals that Mr Carney has sent since the financial crisis.
“As if the situation wasn’t volatile and uncertain enough, the BoE governor poured petrol on the flames,” Mr Clarke said.
Others said the quicker-than-expected appointment of Theresa May as Britain’s new prime minister on Wednesday and the calming of financial markets had lessened the need for immediate action.