A vote to leave rates unchanged held by the bank’s Monetary Policy Committee (MPC) was in favour of leaving rates at 0.75% by 9-0. Financial markets are currently indicating that rates will not rise until after the UK leaves the EU in March.
The Bank of England’s Quarterly Inflation Report, said: “The key risk to near-term growth is the extent to which uncertainty about Brexit affects spending as negotiations with the EU continue.”
In the bank’s quarterly survey of business leaders, it was found that Brexit had become a more important reason for uncertainty in recent months. As a result the bank slashed its growth forecast for business investment this year down to 0%. Despite the uncertainty the bank expects consumer spending to rise “modestly” as wage growth increases.
Recent data from the bank shows that wages, excluding bonuses, are growing at the fastest rate in almost 10 years. It is said that this is supporting economic growth, with the UK economy growing by 0.7% for the three months up to the end of August.