Published: Mon, September 17, 2018
Markets | By Otis Pena

Bank of England set to hold rates amid Brexit uncertainty

Bank of England set to hold rates amid Brexit uncertainty

August's increase of a quarter of a percentage point, from 0.5% to 0.75%, took the main rate to its highest level since March 2009.

House prices could fall by over a third in the event of a no-deal Brexit, Bank of England chief Mark Carney has warned.

However, the Bank has raised its forecast for United Kingdom economic growth in the third quarter from 0.4% to 0.5%, partly due to stronger consumer spending over the unusually warm summer. There is, so far, no full exit agreement between Brussels and London and some rebels in Prime Minister Theresa May's Conservative Party have threatened to vote down a deal if she clinches one. But now, most economists believe that Bank of England would not raise rates again until after the Britain has left the EU. This could considerably squeeze the British households' incomes in future.

Its decision to hold rates came as it said the August set of forecasts appear broadly on track.

"One of the bigger risks for the global economy are developments in China", Carney said in an extract of the interview released on Wednesday on the BBC's website.

Hamilton likes the look of F1's future cars
Brawn would not give further details of the aerodynamic concepts involved in reducing the effect of the wake of one auto impeding the performance of one behind.

The Pound US Dollar (GBP/USD) exchange rate traded in a wide range on Tuesday, initially rallying in the morning before falling back below $1.30 by the end of the European session amid simmering geopolitical tensions.

Details of Carney's briefing to the cabinet on Thursday were reported by British newspapers including the Financial Times, The Times and TheGuardian.

Supporters of Brexit accept there is likely to be some short-term economic pain but say Britain will thrive in the longer term if cut loose from what they see as a doomed experiment in German-dominated unity and excessive debt-funded welfare spending.

The bank is widely expected to increase rates further in the coming years, but the timing of such rate hikes remains unclear, and the next move in rates will nearly certainly not happen until 2019. The latest polls are relatively unchanged with the majority of economists predicting no change to either the BoE's key lending rate at 0.75% or to a change in the amount of borrowing.

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