Bank split points to rate cuts ahead
THE Bank of England signalled yesterday that interest rate cuts are looming, as it lowered growth forecasts in the wake of Boris Johnson’s Brexit deal.
Alarm over a worsening global economy prompted two of the Bank’s nine Monetary Policy Committee (MPC) members to back an immediate cut but they were outvoted and rates were held unchanged at 0.75pc.
The Bank warned it “may need to reinforce the recovery” – signalling further stimulus – if global growth fails to recover and Brexit uncertainties continue, threatening to leave millions of savers facing lower returns if rates go down. The MPC’s first split decision since June 2018 surprised the City and the pound fell as much as 0.5pc to $1.28.
Governor Mark Carney refused to rule out extending his tenure for a third time beyond Jan 31. Mr Carney said he is committed to doing what is necessary to ensure a smooth transition.