Policymakers may look to keep the door open for a hike next year if a Brexit deal is agreed.
|CRIMSON TAZVINZWA, AIWA! NO!|The Bank of England is expected to keep interest rates unchanged at 0.75% on Thursday and remain firmly in wait-and-see mode until Brexit uncertainty clears.
The last rates decision of 2018 comes as prospects of a Brexit deal are left hanging in the balance, with the economy showing signs of stagnating as businesses, consumers and home-buyers put big spending decisions on hold.
Economists believe members of the Bank’s nine-strong Monetary Policy Committee (MPC) will vote to keep rates on hold until there is clarity over a deal and most likely after the UK has quit the EU on March 29.
Just weeks ago, the Bank warned in its Brexit scenario analysis that Britain could be tipped into a recession worse than the financial crisis in the event of a no-deal disorderly Brexit.
Governor Mark Carney has insisted that rates could go up or down after a cliff-edge Brexit, with the Bank’s analysis warning they might be hiked to 5.5% if a further fall in the pound sends inflation soaring.
Investec economist George Brown said: “Given the prevailing Brexit uncertainty, we expect policymakers to refrain from altering any aspects of its monetary policy toolkit.”