BoE: Boxed in by Brexit – Rabobank

Rabobank analysts note that as per expectations, the Bank of England MPC kept rates unchanged at 0.75% while there were no dissenters.

Key Quotes

“The forward guidance of a gradual rise in interest rates is now explicitly conditioned on the assumption that the economy is on a clear path to a smooth Brexit and some recovery in global growth.”

“The MPC also warned that the “entrenched uncertainty” regarding Brexit could lead to a period of below-potential growth in demand. That is yet another clue that the Bank of England isn't going to raise interest rates anytime soon.”

“While we stick to our forecast for no changes in Bank rate in 2019 and 2020 on the premise that the UK will eventually leave the European Union with a deal in place, the risk of a no-deal Brexit remains a sword of Damocles hanging over the UK economy.”