The bank's Quarterly Inflation Report also indicated the bank is willing to consider cutting its key lending rate to zero, The Telegraph reported Wednesday.
The bank cut its key rate to 3 percent last week after trimming rates along with several other central banks in an internationally coordinated effort in October.
In the third quarter, Britain's gross domestic product shrank by 0.5 percent.
Two former Monetary Policy Committee members, Sushil Wadhwani and Willem Buiter, have said the BOE should act quickly to cut rates to 2 percent, The Telegraph said.
"The forecasts for the real economy have also been revised down sharply, with GDP expected to contract throughout next year," said Jonathan Loynes of Capital Economics.
"One percent, here we come!" Loynes said.
Notable deaths of 2014 [PHOTOS]