Bank of England will hold on its monetary policy and will keep interest rate low at 0.5% until the first quarter of 2012 as the U.K. economy will grow less than expected in this year, the Confederation of British Industry said.

Britain's largest employers' group said in its quarterly forecasts that U.K. gross domestic product will expand by 1.3% in 2011, compared with the expected estimate of 1.7% in May, while CBI's growth estimations for 2012 remain unchanged at 2.2%.

The group previously expected the central bank to begin raising rates in the autumn. In addition, the group sees that rates will reach 1.5% by the end of 2012.