Bank of England warns increased downside risks as bank rate held

The Bank of England in central London

The Bank of England in central London

The Bank of England's Monetary Policy Committee has nine sitting members, all of whom voted to keep interest rates locked at 0.75 per cent for now.

Being on track has enabled the Bank to keep rates frozen and not have to raise rates to maintain a grip on prices.

Later on Thursday, the field of candidates hoping to replace Prime Minister Theresa May and take on Britain's so far ill-fated negotiations to leave the European Union will be whittled down to two by Conservative Party lawmakers.

After that grassroots participants will certainly choose that will certainly end up being celebration leader, and also following head of state, by the end of July with Brexit advocate Boris Johnson the much-loved to win.

Most economists, including those at the Bank of England, think that will cause huge damage to the British economy as tariffs and other disruptions are imposed on trade between Britain and the EU.

Warning that downside risks to growth had increased as the threat of crashing out without a deal has risen up the agenda, it said that companies expect uncertainty would persist, while there were no clear signs that firms would increase investments in Britain.

The Bank noted in the minutes of the June MPC meeting that downside risks had increased over the past month, citing global trade tensions which had "intensified" and the rising "likelihood of a no-deal Brexit".

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The stockbuilding boost that saw growth accelerate to 0.5% in the first quarter ahead of the original March 29 Brexit deadline had begun to unwind in the second quarter, as predicted, the Bank said.

Overall, the British economy has largely held up better than anticipated since the Brexit vote. Growth has continued, albeit at lower levels, and unemployment has fallen to a 45-year low of 3.8%.

Rate-setters suggested that wage "growth rates might have levelled off", but also that inflation is likely to fall further over coming months.

If that happens, it's possible that interest rates will rise.

The Bank reiterated that rates will rise "at a gradual pace and to a limited extent", adding that the economic.

This results in yet another contrast and twist from a central banker when you consider that BoE Governor Carney, made optimistic comments on the potential for higher interest rates in the United Kingdom just one week ago! That was reflected in the pound's retreat on Thursday, from $1.2720 to around $1.2680.

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