Monday 19 August 2019

No interest rate change as UK growth is stagnant says BoE

Photo: PA
Photo: PA

The Bank of England (BoE) cut its growth forecast for Britain's economy to zero in the second quarter of 2019 on Thursday and highlighted risks from global trade tensions and growing fears of a no-deal Brexit.

BoE officials voted unanimously to hold interest rates at 0.75pc, despite some recent suggestions from a couple of policymakers that borrowing costs should go up sooner rather than later.

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The central bank stuck to its message that rates would need to rise in a limited and gradual fashion, on the assumption that Britain can avoid leaving the EU in a damaging no-deal scenario.

But the BoE noted a darkening outlook for the world economy which has prompted the European Central Bank, US Federal Reserve and Bank of Japan to signal this week that more stimulus could well be on the way.

"Globally, trade tensions have intensified. Domestically, the perceived likelihood of a no-deal Brexit has risen," the BoE warned in its policy statement.

Reuters

Irish Independent

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