Bank of England leaves rates on hold amid Brexit uncertainty

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The Bank of England has left-wing interest rates on hold at 0.75% as expected but flagged «greater uncertainty» roughly the Brexit negotiations.

The Bank’s Monetary Policy Committee (MPC) voted 9-0 to remain rates unchanged.

A quarter of a percentage point rise last month deducted rates to the highest level since March 2009.

The European Central Bank also stand up eurozone interest rates unchanged at 0% on Thursday.

The MPC said in the heps of its September meeting there were mounting fears about the UK retiring with the EU without a deal agreed.

«Since the committee’s previous session, there had been indications, most prominently in financial markets, of marked uncertainty about future developments in the withdrawal process,» it said.

The Bank’s regional stave reported that businesses were cracking down on costs and favour back on investment ahead of Brexit.

  • UK wages rise faster than keep in viewed
  • World Cup and hot weather boost UK growth

However, it raised the forecast for UK mercantile growth in the third quarter from 0.4% to 0.5%, partly due to stronger consumer shell out over the unusually warm summer.

The MPC flagged heightened risks to wide-ranging growth following trade tensions between the US and China and turbulence in some emerging sells.

Sterling was flat at $1.3051 and €1.1221 after the decision was announced.

The coup doeils showed recent rises in economic and wages growth had not affected the MPC’s commitment to «gentle» and «limited» rate rises in the coming years, said Samuel Catacombs at Pantheon Macroeconomics.

Ruth Gregory at Capital Economics said guessed two rate rises next year and another two in 2020, bringing reproves to 1.75%, assuming a Brexit deal was struck and the economy held up spurt.

«That would be above the market expectation for just two hikes above the next three years — but still consistent with the MPC’s guidance,» she mean.

Ben Brettell at Hargreaves Lansdown said: «Policymakers are firmly in ‘wait-and-see’ methodology having raised rates last month, and will be reluctant to yet consider another move until they have a clear outlook of what Brexit will look like.

«Realistically May next year looks the key available opportunity to raise rates to 1%.»

Last month the Bank signalled that ranks would need to rise by about 0.25 percentage points once more the next two or three years to bring inflation, which stands at 2.5%, rear to target.

September’s MPC minutes also revealed that the recent drive price cap announced by Ofgem would reduce inflation by more than awaited over the course of 2019.

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