Business Irish

Monday 19 February 2018

Pound gains as Bank of England leaves rates unchanged amid concerns over Brexit referendum

Bank of England Governor Mark Carney
Bank of England Governor Mark Carney

Anooja Debnath

Bank of England officials said uncertainty stemming from Britain's referendum on its European Union membership may hold back investment and economic growth as they kept their key interest rate at a record low.

The nine-member Monetary Policy Committee, led by Governor Mark Carney, unanimously agreed to maintain the benchmark at 0.5pc - where it's been for seven years. The decision was taken against a backdrop of feeble inflation, slowing global expansion and concern that the UK will vote to quit the EU on June 23.

The pound climbed the most since 2009 after the Bank of England's minutes showed policy makers think interest rates will more likely than not rise in the next three years.

"There appears to be increased uncertainty surrounding the forthcoming referendum," officials said in the minutes of their March meeting. "That uncertainty is likely to have been a significant driver of the decline in sterling.

"It may also delay some spending decisions and depress growth of aggregate demand in the near term."

Mark Carney has already found himself embroiled in the political battle and has been criticised for remarks seen by some as favouring the UK staying in the EU. (Bloomberg)

Irish Independent

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