Bank of England Governor Mark Carney has explained the bank's decision hold interest rates unchanged at 0.25% as it revises growth and inflation forecasts.
The Bank has increased its growth outlook for the UK economy to:
It also slashed its forecast for 2018 to 1.5% and said inflation was set to surge to 2.7% next year.
Speaking at news conference, Mr Carney pointed to the better than expected growth of 0.5% in the third quarter of the year despite the Brexit vote.
He said that since August "demand growth has been materially better than expected".
Mr Carney said the bank's Monetary Policy Committee (MPC) had expected consumption to grow slowly through-out the remainder of 2016 but it has been "even stronger".
"For households, the signs of an economic slowdown are notable by their absence," he said.
"Perceptions of job security remain strong, wages are also growing at around the same modest pace as at the start of the year.
"Credit is available and competitive, and confidence is solid, he added.
The governor added that the "positive consumer sentiment" has supported the housing market which he said that been more resilient than expected.
- Carney warns its 'still early days' after Brexit vote
However, he cautioned that it was still "early days in Brexit adjustment process".
"Household, firms, financial markets and yes the MPC will continue to learn as they go, and they will adjust their expectations accordingly," he said.
Mr Carney also stressed that growth in the medium term is anticipated to be more modest.
He added that the MPC would continue to "be as transparent as possible" going forward as they interpret the impact that Brexit will have the economy.