Britain’s central bank expects to keep interest rates steady

Britain’s central bank expects to keep interest rates steady

This is after a Halloween policy meeting which economists said would leave long-term plans to raise borrowing costs in “suspended animation”.

Rather than zombie companies or supernatural forces, it is the more familiar bogeyman of an economically damaging no-deal Brexit which is almost certain to keep the Bank of England on hold after its last interest rate rise three months ago.

“Until a deal is done - or not - we suspect the BoE is in suspended animation,” Bank of America Merrill Lynch economist Robert Wood wrote in a note to clients.

A year ago the BoE raised interest rates for the first time since the global financial crisis and followed this with a further rise in borrowing costs to 0.75 percent in August.

 

Economists polled by Reuters expect the nine members of the BoE’s Monetary Policy Committee to have voted unanimously to keep rates on hold this month, and on average do not see a further rate rise until May.

Britain is due to leave the European Union on March 29 next year, but Prime Minister Theresa May has yet to secure a transitional deal that will ensure goods and people can continue to move freely between Britain and the EU the day after.

Published: by Radio NewsHub
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