March 24, 2019

As economy weakens, Bank of England holds off on rate hike

LONDON — The Bank of Englands monetary policy committee Thursday decided to keep interest rates on hold.

The committee voted seven to two to retain the BoEs benchmark rate at 0.5 percent. It also voted unanimously to keep the stock of bond purchases unvaried.

The decision had been expected after a series of weak economic data was published at the end of last month, prompting analysts and investors to change their previous forecast of a rate hike.

Around the same time, Governor Mark Carney also had signaled in an interview to the BBC that the uncertainty around the Brexit negotiations could lead the MPC to delay raising interest rates.

The BoEs quarterly Inflation Report, also published today, said the U.K.s CPI inflation “has fallen back more rapidly than expected three months ago” and is forecast to reach its target of 2 percent in two years rather than in 2021. Thursdays forecast shows inflation should drop to 2.4 percent by year-end, instead of the previously forecast 2.7 percent.

Original Article

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