Investing.com - The Bank of England left interest rates unchanged as uncertainty over the UK’s exit from the European Union - with little more than three months to go - increases.
The BoE’s Monetary Policy Committee voted unanimously to hold rates steady at 0.75%.
“Brexit uncertainties have intensified considerably since the Committee’s last meeting,” the BoE explained in its meeting minutes, pointing to the fact that those uncertainties were weighing on financial markets and the near-term outlook for economic growth in the UK.
“The broader economic outlook will continue to depend significantly on the nature of EU withdrawal, in particular: the form of new trading arrangements between the European Union and the United Kingdom; whether the transition to them is abrupt or smooth; and how households, businesses and financial markets respond. The appropriate path of monetary policy will depend on the balance of the effects on demand, supply and the exchange rate,” the central bank said.
The BoE has raised interest rates twice since November 2017, but policymakers made clear that the next move could be in either direction, depending on the impact from Brexit.
Economists widely anticipate the British monetary authority to remain on hold until after the Mar. 29 exit data, making the meeting in May the first viable possibility.
“Given all the noise surrounding Brexit, it’s looking increasingly likely that the central bank will remain on hold through the first half of 2019 (and possibly beyond),” ING economists said in a note.