Bank of England set to hold rates ahead of United Kingdom election

Bank of England set to hold rates ahead of United Kingdom election

The projections come ahead of a nationwide election December 12, when Mr. Johnson is hoping to secure a majority in Parliament to ratify a Brexit deal agreed last month with Brussels.

LONDON-The Bank of England said it expects the U.K. economy to grow modestly over the next three years if the U.K. Parliament ratifies Prime Minister Boris Johnson's Brexit deal and the country agrees to a free-trade accord with the European Union.

Alarm over a darkening global climate prompted two of the Bank's nine Monetary Policy Committee members to vote for an immediate cut in interest rates, which were held unchanged at 0.75pc.

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However, its latest dovish forecasts said rate-setters "may need to reinforce the recovery" - a huge hint of further stimulus - if global growth fails to recover and Brexit uncertainties "remain entrenched", threatening a fresh potential blow for.

US-China trade developments will also remain in focus, and with any indications that the world's two largest economies can make a concession on a "Phase 1" trade deal this month could boost optimism in the Eurozone's economy, which relies heavily on global trade stability.

For now, markets are betting that a solid election win for Britain's ruling Conservative Party will lead to a relatively soft Brexit, which is keeping Sterling buoyed.

Carney said he is expecting a deal to be approved, allowing Britain to leave the European Union by January 31.

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The main opposition Labour Party wants to renegotiate Johnson's deal to ensure closer ties and then put it to the people in another referendum, with an option to remain in the EU.

Brexit uncertainty has contributed to a slowdown in growth, largely by weighing on business investment.

The British pound falls 0.2% against the USA dollar.

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 MPC judges at this meeting that the existing stance of monetary policy is appropriate.

The bank said in a statement that continued uncertainty may lead to a future cut. These agreements are expected to remove some of the uncertainty facing businesses and households, and the MPC projects that UK GDP growth will pick up during 2020.

There may also be more clarity about Carney's successor.

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