Bank of England keeps rates on hold ahead of United Kingdom election

Bank of England set to hold rates ahead of UK...

Bank of England cuts growth forecasts on Boris Johnson's Brexit deal

That is, the agreement has not yet been approved by the British parliament in the early elections on 12 december, after scaring the investors off.

The Bank of England has left its main interest rate at 0.75 percent, it said Thursday after a regular meeting and before next month's United Kingdom general election to unlock Brexit.

The growth outlook for the British economy has deteriorated largely as a result of a gloomier global backdrop, the Bank of England said Thursday as it refrained from cutting rates in the run-up to a general election that could have huge repercussions on Brexit.

Bank of England keeps its bank rate at 0.75%, however two members of the monetary policy committee voted for a 25 basis point cut in the rate.

Meanwhile, the Bank also announced today that interest rates would be held at the current level of 0.75 per cent.

"If global growth failed to stabilise or if Brexit uncertainties remained entrenched, monetary policy might need to reinforce the expected recovery in UK GDP growth and inflation", they said in a summary of their policy discussion. This will be further supported by easier United Kingdom fiscal policy and a modest recovery in global growth.

The main opposition Labour Party advocates keeping the United Kingdom within the European Union customs territory after Brexit, and also proposes offering voters the choice of staying in the European Union in a second referendum. The main opposition Labour Party wants to renegotiate that deal and then put it to the people in another referendum with an option for Britain to remain in the EU. And most other prospective lawmakers in the House of Commons are predicted to be anti-Brexit. That slowdown reflects weaker global growth, driven by trade protectionism, and the domestic impact of Brexit-related uncertainties.

The US dollar rose against the pound today after US initial jobless claims for November beat forecasts and eased from 219 to 211 thousand, consistent with improving labour market conditions and job growth.

Michael Saunders and Jonathan Haskel, who voted for the cut, argued that the British economy had "a modest but rising amount of spare capacity" and that underlying inflation was "subdued".

About three quarters of this was due to a weaker global economy and strengthening in sterling since the risk of a no-deal Brexit had diminished, but part of it reflected Johnson's Brexit plans.

The MPC judges at this meeting that the existing stance of monetary policy is appropriate.

Any deal would have led to a cut in growth forecasts, but increased certainty will help to drive a near-term pick-up in investment growth, the bank added.

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