The Bank of England should keep interest rates on hold tomorrow due to uncertainty over Brexit, global trade tensions, and recent weak UK data, City A.M.’s shadow monetary policy (MPC) has argued.

 

Ongoing uncertainty over how Brexit will turn out, and the increasing chances of “no deal” under a Boris Johnson premiership, mean Mark Carney’s Bank will most likely wait until changing anything in the economy.The raging US-China trade conflict has dragged down confidence worldwide. A rate hike would likely push up the pound, making UK exports less competitive at an already difficult time.

 

Recent data from the UK economy has suggested momentum may be slowing. GDP fell by 0.4 per cent month on month in April, official figures showed. Today official statistics showed inflation cooled to two per cent in May from 2.1 per cent in April.

 

Vicky Pryce, CEBR Hold

Stockpiling, which helped activity early in the year, has now gone into reverse. Price pressures remain subdued, world economic prospects have worsened and Brexit uncertainty has if anything increased.

 

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