This article is from the source 'bbc' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at https://www.bbc.co.uk/news/business-46635894
The article has changed 4 times. There is an RSS feed of changes available.
Version 0 | Version 1 |
---|---|
Bank cuts growth forecast amid Brexit worries | Bank cuts growth forecast amid Brexit worries |
(35 minutes later) | |
The Bank of England has cut its UK growth forecast and warned a lack of Brexit clarity is hitting the economy. | |
The Bank said uncertainty over the UK's departure from the EU had "intensified considerably" over the past month. | The Bank said uncertainty over the UK's departure from the EU had "intensified considerably" over the past month. |
Against a backdrop of weaker global growth, the Monetary Policy Committee (MPC) voted unanimously to keep interest rates at 0.75%. | Against a backdrop of weaker global growth, the Monetary Policy Committee (MPC) voted unanimously to keep interest rates at 0.75%. |
It said the economy was likely to grow by 0.2% in the final quarter of 2018, down from an earlier forecast of 0.3%. | |
That follows growth of 0.6% in the previous quarter. | That follows growth of 0.6% in the previous quarter. |
The Bank expects slower economic growth to continue into 2019. | The Bank expects slower economic growth to continue into 2019. |
What next for rates? | |
The Bank of England last raised interest rates in August to 0.75%, but has been reluctant to push them higher while uncertainty remains over Brexit. | |
But if there is some clarity, then economists say the Bank is likely to make a move. | |
"We continue to think that the MPC won't wait for signs of a recovery to emerge in the data and will raise Bank Rate to 1.0% in May, once MPs have signed off a Brexit deal late in the first quarter," said Samuel Tombs, Chief UK Economist at Pantheon Macroeconomics. | |
The UK government's decision to abandon a vote on the Brexit deal last week dragged down UK share prices and triggered a drop in the value of the pound. | The UK government's decision to abandon a vote on the Brexit deal last week dragged down UK share prices and triggered a drop in the value of the pound. |
Commercial bank funding costs had also "risen sharply", the Bank noted, which could push up consumer borrowing costs. | Commercial bank funding costs had also "risen sharply", the Bank noted, which could push up consumer borrowing costs. |
The Bank said the outlook for pay was brighter, with wages growing faster than policymakers expected in November. | The Bank said the outlook for pay was brighter, with wages growing faster than policymakers expected in November. |
Measures announced in the Budget at the end of October, including a multi-billion pound funding boost for the NHS, would lift growth by 0.3% over the next few years, the Bank said. | Measures announced in the Budget at the end of October, including a multi-billion pound funding boost for the NHS, would lift growth by 0.3% over the next few years, the Bank said. |
Lower oil prices were likely to push inflation below the Bank's 2% target by the end of the year. Policymakers expect inflation to remain there into the start of 2019. | |
A separate Bank survey suggested that business services firms, including law and accountancy companies, believed activity could slow "sharply" in the event of a no-deal Brexit. | A separate Bank survey suggested that business services firms, including law and accountancy companies, believed activity could slow "sharply" in the event of a no-deal Brexit. |
The survey also indicated that Black Friday sales had "failed to meet many retailers' expectations" as cautious consumers kept spending down ahead of Christmas. | The survey also indicated that Black Friday sales had "failed to meet many retailers' expectations" as cautious consumers kept spending down ahead of Christmas. |
While business surveys suggest weak growth in the months ahead, the Bank noted that it was "it was possible that these surveys might be overstating the extent of any slowing". | While business surveys suggest weak growth in the months ahead, the Bank noted that it was "it was possible that these surveys might be overstating the extent of any slowing". |