Bank of England keeps rate at 0.5% amid Brexit uncertainty

The Bank of England has kept interest rates on hold amid conflicting signals on the economy and Brexit uncertainty. Policymakers voted 6-3 to keep the main rate at 0.5% as economists looked to their August meeting, when the next set of quarterly forecasts are published. Policymakers face a dilemma on the timing of the next […]

By The Associated Press | June 21, 2018 | Last updated on June 21, 2018

2 min read

The Bank of England has kept interest rates on hold amid conflicting signals on the economy and Brexit uncertainty.

Policymakers voted 6-3 to keep the main rate at 0.5% as economists looked to their August meeting, when the next set of quarterly forecasts are published.

Policymakers face a dilemma on the timing of the next increase. Wage growth has stalled but inflation remains above the 2% target, at 2.4%.

Minutes to Thursday’s policy meeting say that the policymakers agreed that rates would have to be increased, but “all members agree that any future increases in the bank rate are likely to be at a gradual pace and to a limited extent.”

Howard Archer, chief economic adviser at the EY Item Club, says it’s “touch and go as to whether the Bank of England raises interest rates in August or holds off until November.”

Read: U.K. inflation in surprise fall, raising questions about next rate hike

Plan to keep UK as a finance hub

Britain’s Treasury chief is expected to outline plans to ensure the nation’s financial services industry can thrive after the U.K. leaves the European Union when he delivers a speech to top business executives Thursday night.

Philip Hammond says in excerpts released ahead of his annual Mansion House speech that London will remain the “global capital of finance.”

Hammond will highlight plans to negotiate international agreements easing trade in goods and services, saying that “being open to the world” is the key to future success.

He says “our vision is for a set of new partnerships combining new tools, like free trade agreements, and existing ones, like our financial dialogues, looking across sectors of the industry and positioning the U.K. as the most global financial services market in the world.”

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