Bank of England Keeps Monetary Policy Unchanged
Britain’s central bank decided to keep its monetary policy without changes, indicating that any more hikes will be at a gradual pace as it monitors developments with ongoing Brexit negotiations between the UK and the European Union. The Bank of England’ Monetary Policy Committee (MPC) voted unanimously to hold rates steady at 0.75%.
The BoE said, the UK economy was expected to start running above capacity late next year and GDP likely to continue to grow by around 1.75% a year. This is some way below the rate of above 2% that was typical before Britain voted to leave the EU, but the BoE said the economy was at full capacity and inflation would take three years to drop from 2.4% now to its 2% target.
Brexit is now dominating the economic forecasts for the world's fifth largest economy, which growth has been slowing since June 2016 referendum to leave the European Union. Most economists think the British central bank will wait until May 2019 to raise rates again, assuming the UK leaves the EU with a deal.