Bank of England leaves interest rates unchanged

The Bank of England decided to keep interest rates on hold at 0.75% but left the door open to lowering the cost of borrowing if global economic growth weakens or issues relating to Brexit arise.

The Bank of England (BoE) opted to leave interest rates unchanged at 0.75% on Thursday but said that it would consider lower the cost of borrowing if global economic growth weaken further or Brexit uncertainties worsen.

The BoE’s Monetary Policy Committee (MPC) voted 7-2 in favour of keeping interest rates on hold.

‘If global growth fails to stabilise or if Brexit uncertainties remain entrenched, monetary policy may need to reinforce the expected recovery in GDP growth and inflation,’ the committee said in a statement.

Strength of sterling key to next BoE rate decision

The BoE sat on the fence in its latest monetary decision to hit the markets, according to Senior Market Analyst Josh Mahony.

‘Despite a rate hike from the Swedish Riksbank, the BoE instead chose to lay out a largely neutral outlook which specified a potential to move in either direction depending on data developments,’ Mahony said.

‘With recent data highlighting a sharp decline in UK business activity, markets should take any pre-election data with a pinch of salt.’

‘Instead, the coming months are likely to become a very volatile affair for the pound, with any major swings in the economic outlook providing a direction for the BoE to target their policies,’ he added.

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