The Bank Of England set to keep interest rates at 0.75% as Brexit uncertainty reigns

This is Money
Interest rates are not expected to rise again after a momentous hike to 0.75% last

This is MoneyInterest rates are not expected to rise again after a momentous hike to 0.75% last

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.

Governor Mark Carney came under heavy political fire after the Bank’s doomsday Brexit report (Daniel Leal-Olivas/PA)

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.”

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.