(Alliance News) - The Bank of England on Thursday kept interest rates on hold, though saw two members dissent.
While interest-rate cuts would of course cause issues for the value of the British pound, the reality is that nobody cares about interest rates at this point and it's all about Brexit.
Following the Bank of England's decision to keep its policy rate unchanged at 0.75%, Governor Mark Carney is delivering his remarks on the monetary policy outlook in a press conference with key quotes, via Reuters, found below.
They cited risks from Brexit, a slowing in global growth, and signs of a weaker job market in the United Kingdom as reasons for their decision.
If Mark Carney acknowledges a weaker global and domestic outlook in his speech, as predicted, we could see Sterling ease against the Euro on heightened fears for the struggling British economy.
"If global growth fails to stabilize, or if Brexit uncertainty remains entrenched, monetary policy may need to reinforce the expected recovery", officials said in the summary of the meeting, published Thursday.
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But with the election set for December 12, the country will have little time before it is due to leave the EU. Most economists think a no-deal Brexit would lead to a deep recession as tariffs and other impediments are slapped on trade with the EU, Britain's main export destination.
The new forecasts, which assume that Britain leaves the European Union with a deal on January 31, contrasted with the Bank of England's (BoE) prior predictions of 1.3 percent for both years. 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.
The minutes meanwhile noted "downside risks to the MPC's projections from a weaker world outlook and from more persistent Brexit uncertainties affecting corporate and household spending". The level of GDP will be 1% lower at the end of the forecast period than expected in August.
The central bank forecast growth of 1.25% this year, a similar pace in 2020 as a free-trade accord is negotiated, and slightly faster growth of 1.75% in 2021. This is largely because of upwards revisions to estimates of service sector output in June and July, while growth appeared to be boosted slightly by a return to "usual seasonal" levels of vehicle production following Brexit-related shutdowns earlier in the year.
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".
The Committee's new projections for activity and inflation are set out in the accompanying November Monetary Policy Report.