The Bank of England holds interest rates and has cut UK forecast growth, sterling fell to 0.3 per cent to $1.3187.
The bank has said it is to withdraw part of the monetary policy stimulus that was introduced in August 2016, the MPC voted 6-2 to leave interest rates at 0.25 per cent.
The minutes of the Bank’s Monetary Policy Committee (MPC) meeting said: “Monetary policy could need to be tightened by a somewhat greater extent over the forecast period than the path implied by the yield curve underlying the August projections.”
The bank said that there is evidence that people are spending less on electrical goods and items for the home including cars, they pointed out that the housing market is weakening and consumer confidence has fallen, which might indicate that people are curbing their spending.
Wages are expected to grow by 2 per cent which is below inflation of 2.6 percent, consumers have been borrowing more as a result as rates are currently low.