Government spending looks set to help the economy defy Brexit slowdown fears, with the Bank of England upgrading its growth forecasts for the next three years.

In its quarterly inflation report, the Bank upped its forecast for gross domestic product (GDP) to rise by 2% this year, 1.6% in 2018 and 1.7% in 2019.

This is up from its November predictions for 1.4% growth in 2017, 1.5% in 2018 and 1.6% in 2019.

Policymakers also voted unanimously to keep interest rates on hold at 0.25%

But rate-setters warned a consumer spending slowdown was still on the cards as soaring inflation caused by the weak pound and poor wage growth will see household income stall over the next two years.

The latest forecasts come after impressive growth of 0.6% in the final quarter of 2016 as GDP has remained surprisingly resilient since the Brexit vote last June.

The Bank, which has now raised its growth outlook twice in the last three months, said the "most significant" reason for the upgrades was the Government spending boost revealed in the Chancellor's Autumn Statement last November.

It added that a solid global economy, surging stock markets and cheap borrowing were also helping support growth.