The Bank of England (BOE) has kept its main interest rate unchanged Thursday amid uncertainty over the economy’s wider direction.
The central bank’s Monetary Policy Committee (MPC) was widely expected to hold rates at their current 0.5 percent level, amid falling inflation and lackluster growth data.
The MPC voted by 6-3 to keep rates at the current level, with the bank’s Chief Economist Andy Haldane joining more hawkish committee members Michael Saunders and Ian McCafferty in calling for a rate rise to 0.75 percent.
Policymakers on the committee postponed raising rates in May following weaker-than-expected economic data. The bank also said it expected the U.K. economy to grow by 1.4 percent in 2018, downgrading its previous projection of 1.8 percent.
Against such a lackluster economic backdrop, no economists polled by Reuters expected a rate rise in June. The news agency also noted that some are getting “cold feet” about the prospect of a rate rise in August.
Market expectations are for a less than 40 percent likelihood of the MPC raising interest rates by August, with about an 80 percent chance of one more rate hike by the end of 2018, Reuters said ahead of the decision Thursday.
Sterling sank to a seven-month low ahead of the meeting, to $1.3125. The latest decision comes amid continuing uncertainty over the direction of the economy, ahead of the U.K.’s departure from the European Union in March 2019.
