The Bank of England keep interest rates on hold

The Bank of England keep interest rates on hold

They highlighted greater financial market concerns about Brexit, a month after raising borrowing costs for only the second time in more than a decade.

The BoE said its nine rate-setters voted unanimously to hold rates at 0.75 percent, in line with economists’ expectations in a Reuters poll, and said there had been limited domestic developments since its Aug. 2 meeting, other than on Brexit.

“Since the Committee’s previous meeting, there have been indications, most prominently in financial markets, of greater uncertainty about future developments in the (European Union) withdrawal process,” the central bank said.

The BoE’s regional staff reported businesses were tightening cost control and holding off on investment ahead of Britain’s March 2019 withdrawal from the EU. Exporters surveyed for the BoE saw a 40 percent chance that Brexit would hurt their sales.

Nonetheless, BoE staff raised their forecast for third-quarter growth to 0.5 percent from 0.4 percent, partly due to stronger consumer spending over an unusually warm summer.

Most economists polled by Reuters do not expect the BoE to raise rates again until after Britain has left the EU, and the BoE reiterated that business, financial market and household reaction to Brexit would affect the path for monetary policy.

Published: by Radio NewsHub
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