Economy

Bank of England keeps main interest rate unchanged at 0.75%

Bank of England keeps main interest rate unchanged at 0.75%”

He leaves in March, to be replaced by former deputy governor Andrew Bailey.

It looks like Mark Carney is stepping down as governor of the Bank of England without a final blast of fireworks.

The British central bank will assess the economy's near standstill in late 2019, against early signs that Prime Minister Boris Johnson's emphatic victory in December's election has boosted confidence, at least for now.

"I don't have a regret", Carney said when asked if he had any with regard to monetary policy moves during his tenure.

Most economists think the economy will have done well to eke out growth any higher than 1 per cent past year, which would be the lowest yearly rate since the country emerged from recession a decade ago. However, if the survey data augurs a period of higher growth, then many economists think a rate hike could be in the offing sometime this year.

In minutes of the MPC meeting, the Bank said: "Since the December meeting, global developments had been positive and the most recent United Kingdom data supported the forecast of a near-term recovery in growth".

Adding that the economy is positioned firmly on the path of stability with inflation forecasted to stay within the medium term target band of 8±2 percent, barring any unanticipated shocks.

Two policymakers, Michael Saunders and Jonathan Haskel, have been voting for a rate cut since November.

The minutes showed that the majority of rate-setters think United Kingdom growth will pick up a tad in 2020, supported by a more stable global economy, a further decline in Brexit uncertainties and expectations the British government will loosen the purse springs.

Brexit uncertainty has been largely to blame for tepid growth since the United Kingdom voted to leave the European Union in June 2016. However, the MPC will have weighed this improvement against a possible global economic downturn caused by the coronavirus and uncertainty about the course of the EU-UK trade talks once Brexit takes place. "For example, a renewal of trade tensions could reverse recent progress".

"UK needs to make some potentially large structural changes to raise growth potential".

The minutes of the latest BoE meeting showed that two doveish policymakers had cited "downside risks" to the bank's projections arising from "Brexit uncertainties and a weaker world outlook".



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