The Bank of England’s monetary policy committee has voted unanimously to keep the base rate at 0.75 per cent.
The rate has stayed at this level since it was raised from 0.50 per cent in early August last year.
The MPC, according to the minutes, believes that the economic outlook hinges “significantly” on Brexit, and is prepared to respond to its outcome in a way that “would not be automatic and could be either direction”.
Santander chief economist Frances Haque says: “The decision to hold rates was widely expected by both the market and commentators, given the continued uncertainty around Brexit.”
Premier Asset Management chief investment officer Neil Birrell agreed that Brexit made a rate change untenable, and has moved managing to the Bank’s inflation target down its list of priorities.
He says: “There was never really any chance of a change to rates at this meeting of the MPC given the economic backdrop and the parlous state of Brexit. But it was interesting to note that the Bank of England commented on the fact that more companies are triggering plans for a no-deal Brexit. Clearly the uncertainty is doing no good for the economy which they pointed out.
“For now it’s all about Brexit and rates could move either way depending on the outcome, although it is very difficult to see a scenario where they will rise. Inflation is lower than the 2 per cent target but the Bank will let that go for now; there are bigger things for them to worry about and the rate decision today will have no direct effect on markets.”