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- The Bank of England left interest rates on hold at its September meeting.
- The bank raised rates at its previous meeting in August so was always unlikely to change policy for a second consecutive month.
- The base rate of interest remains at 0.75%.
- The bank’s decision came just two days after it was announced that Governor Mark Carney has extended his stay at the helm of the central bank until early 2020.
The Bank of England left interest rates on hold at the September meeting of its Monetary Policy Committee (MPC), as had been universally expected.
The nine-member MPC voted unanimously to leave rates on hold at 0.75%.
The central bank raised its base rate of interest from 0.5% to 0.75% last month and was always likely to leave rates unchanged on Thursday. Any other outcome from the meeting would have been a significant surprise to markets.
“With Brexit negotiations heating up, the BoE will more than happy to drift into the background, having come under fire for its views in the past,” Craig Erlam, a senior market analyst at OANDA, said in an email.
“With the outlook so uncertain and hanging on the outcome of these negotiations, there’s little upside to the central bank making any changes to its policy message between now and the end of the year.”
The bank is widely expected to increase rates further in the coming years, but the timing of such rate hikes remains unclear, and the next move in rates will almost certainly not happen until 2019.
Minutes from the September meeting of the MPC said that: “Any future increases in Bank Rate were likely to be at a gradual pace and to a limited extent.” This was the same language used during the August MPC meeting.
The bank provided an update on its planning for Brexit alongside the rate announcement. The bank said that it continues to base its projections on “a smooth adjustment to the average of a range of possible outcomes for the United Kingdom’s eventual trading relationship with the European Union.”
However, it did note that uncertainty over Brexit has increased in recent months.
“Since the Committee’s previous meeting, there have been indications, most prominently in financial markets, of greater uncertainty about future developments in the (EU) withdrawal process,” it said.
The bank’s meeting comes just two days after it was announced that Governor Mark Carney has extended his stay at the helm of the central bank until early 2020. He was previously set to leave next summer.