The British central bank leaves the main interest rate unchanged at 0.75 percent, as generally expected in the financial markets. In August last year, the Bank of England (BoE) raised interest rates by a quarter of a percentage point.
The BoE makes a step at the place in the run-up to the brexit. The central bank had already said in December that the uncertainty surrounding the brexit has increased considerably. In the absence of an agreement with the European Union, the British economy can get a big hit.
Partly due to this uncertainty, the BoE also increased its growth estimates. Whereas earlier this year 1.7 percent economic growth was taken into account, that is still 1.2 percent. The prognosis for 2020 was adjusted from 1.7 to 1.5 percent.
The central bank also expects that inflation will fall below 2 percent in the coming months, when the Brexit takes place. Estimates for investments were also adjusted downwards. This year, the BoE is counting on a decrease of 3 percent. Then the investment drive will pick up again.