The Bank of England has warned that continuing Brexit uncertainty and the prospect of further delay until the summer is serving as a brake on the economy, as it left interest rates on hold.

Amid signs that the political turmoil is increasingly taking its toll on business investment decisions, paving the way for weaker economic growth in future, the Bank’s nine-member monetary policy committee (MPC) voted unanimously to leave interest rates at 0.75%.

It said increasing risks for the economy were emerging, with parliament at an impasse, while warning that further delay would continue the damage to the economy for longer.

The MPC said there was the “possibility of further cliff-edge uncertainties that could have a significant effect on [business] spending as any new deadline approached”, in a comment that comes a day after Theresa May said she would seek an extension in the article 50 process until the summer.

Threadneedle Street said more companies were stockpiling goods and had put off their investment plans amid lingering uncertainties, estimating that business investment in the British economy was currently as much as 14% below where it would have been without Brexit.

Although it found increasing numbers of companies said they were ready for a no-deal, no-transition Brexit, up from 50% in January to 80% last month, it said many were unclear about what exactly they needed to plan for.

“Many of those companies had also reported that there were limits to the degree of readiness that was feasible in the face of the range of possible outcomes,” the Bank said.

It added that the cumulative effect of business uncertainties on investment spending appeared to have increased recently. More companies have become concerned about Brexit, with about 60% of firms in February telling its network of agents across the country they were worried, up from 40% immediately after the referendum almost three years ago.

As many as 20% of companies in a panel of key decision-makers surveyed by the Bank thought Brexit uncertainty would persist to 2021 or beyond.

Despite the impact on business investment from Brexit, economic growth has been stronger than expected in recent months. Unemployment has dropped to the lowest levels since the mid-1970s and wage growth has accelerated at the fastest pace in a decade.

The Bank said that for these reasons, should Brexit pass smoothly, it would need to raise interest rates in future. However, it warned that failure to reach a deal could mean an emergency interest rate cut, or even a hike if it needed to fend off a spike in inflation caused by crashing out without a deal.

The MPC added: “The economic outlook will continue to depend significantly on the nature and timing of EU withdrawal.”