Economists predict Bank of England will keep interest rates on hold this week with Article 50 on the horizon
The Bank of England will keep interest rates firmly on hold this week as policymakers remain in wait and see mode as Britain prepares for divorce with the EU, economists predict.
The Government could trigger Article 50 as early as Tuesday and economists believe the Bank’s Monetary Policy Committee will unanimously vote to hold rates at 0.25 per cent two days later in the face of potential economic upset from Brexit negotiations.
This is despite a growing number of rate-setters on the MPC being uncomfortable with soaring inflation. It would mark exactly eight years of no interest rate rises.
Archer, at IHS Global Insight, said: ‘We believe the Bank of England will remain pretty tolerant on the inflation overshoot given the prolonged, highly uncertain outlook that the UK economy is likely to face as the Government negotiates the exit from the EU.’
Given the inaccurate forecasts ahead of the Brexit vote, there is little certainty of what the upcoming negotiations will mean for the UK economy.
