The Bank of England unanimously voted to put interest rates on hold

The Bank of England unanimously voted to put interest rates on hold

The Bank of England held interest rates at 0.75 percent on Thursday, saying that recent developments in the UK economy were in line with their forecasts.

The BoE's Monetary Policy Committee unanimously voted in favor of unchanged interest rates and agreed that "monetary policy will continue to tighten" as long as there is a "soft adjustment" to Brexit.

The vote was expected by the financial markets after the rise in the quarterly rate in August. Market participants expect interest rates to remain unchanged for the remainder of the year before one or two increases in 2019.

In its policy statement, the MPC said the central bank's recent economic forecasts "are broadly on track", with growth somewhat faster than the economy can endure, and therefore the prospect of modest inflationary pressures in the second half of next year.

On the assumption of a favorable Brexit agreement with the EU, the MPC said that by the end of 2019, there would likely be "a small overnight margin" that would require "incremental and limited" further interest rate increases.

The MPC warned that global protectionist pressures had risen faster than expected, which could dampen the global economy more than the committee had expected when it last presented detailed forecasts in August.

However, the most important message from the MPC was that the UK economy was in equilibrium and inflation gradually returned to the BoE's 2% target from the July rate of 2.5%.

In addition to explaining the decision by the committee, the BoE published a new survey and its latest summary of terms and conditions from its regional agents throughout the country.

The business survey, which is larger than most private sector correlates, suggests that corporate leaders have underestimated a slowdown in sales and that this slowdown is likely to continue.

The companies were nervous about the impact of Brexit on the sale. 40 percent of respondents said they would expect the EU to reduce their exports. Only 14 percent planned higher exports.

The survey also showed that consumer-oriented industries had a good summer thanks to the warm weather, while manufacturing growth slowed.

This is in line with the latest official data showing strong retail spending but a decline in production output.

Many companies reported difficulties in hiring suitable staff, but this demand for labor had only a modest effect on wages.

BoE regional representatives noted that "average pay settlements were slightly higher than a year ago in a range of 2.5 to 3.5 percent".

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