The Bank of England left interest rates on hold on Thursday. as it awaits further clarity on Britain’s preparedness for exiting the EU.
- The BoE left its refinancing rate unchanged at 0.75%, as expected, in a unanimous vote.
- If Brexit uncertainty persists, inflation will likely become weaker, the bank said in its statement. Staff forecasts expect inflation to remain below 2% target for the rest of this year. Officials also reiterated that reaction to no-deal Brexit would not be automatic.
- Outlook for global growth has weakened due to US-China trade war; UK underlying growth has slowed but remains positive
- GBP/USD was trading at 7:00 AM ET (1100GMT) from around 1.2447 ahead of the decision, while EUR/GBP was at 0.8884 from 0.8888 earlier.
- The decision came a day after data showing that the annual rate of inflation in the U.K. dropped to a three year low of 1.7%
