The Bank of England today announced that Brexit uncertainty had “intensified considerably” over the last month and that falling oil prices were likely to push inflation below its 2 per cent target.
All nine of its rate-setters voted to keep rates at 0.75 per cent, as expected.
“Brexit uncertainties have intensified considerably since the committee’s last meeting,” the Monetary Policy Committee said in a summary of its December meeting, adding: “These uncertainties are weighing on UK financial markets.”
“The Bank continued to hint that it could conceivably raise interest rates to curb inflation in the event of a no deal Brexit. But we and the markets believe it’s bluffing. To limit the temporary fallout to the economy, the Bank would surely cut rates swiftly,” Paul Dales of Capital Economics further told media.