Bank of England holds rates at 0.75 percent

The Bank of England’s Monetary Policy Committee voted 7-2 to hold its bank rate at 0.75 percent Thursday in a rare split decision a little more than a month before Dec. 12 parliamentary elections.

The Bank of England’s monetary policy committee agreed Thursday to hold its rates at 0.75 percent, despite two members calling for a cut. Photo by Facundo Arrizabalaga

Committee members Jonathan Haskel and Michael Saunders called for a quarter-point rate cut as Britain faced the continued uncertainty over Brexit. Mike Carney, governor of the bank, led the majority in voting to hold the line on the rate.

The bank said in a statement that continued uncertainty may lead to a future cut.

“With the risk of a no-deal Brexit falling recently, we expect the uncertainty facing households and businesses to fall,” the bank said. “We also expect global growth to recover gradually. These developments should help growth here in [Britain]. If that does not happen, then we may need to lower interest rates to support [Britain’s] growth and ensure that we return inflation to our 2 percent target sustainably.”

In a news conference, Carney declined to characterize Prime Minister Boris Johnson’s Brexit deal as better or worse than the one negotiated by former Prime Minister Theresa May. He said a deal approved by the Parliament, regardless whose deal it is, will lessen the uncertainty, which would boost the economy.

Carney said he is expecting a deal to be approved, allowing Britain to leave the European Union by Jan. 31. He said the bank may need to still cut interest rates if global growth fails to stabilize or if Brexit fails to end economic uncertainties.

ByClyde Hughes