Interest rates to remain on hold as Brexit drags

Bankofenglandpolicymakers are likely to sit on their hands today amid an uncertain outlook for the UK economy.

The central bank’s latest interest rate decision, which will be accompanied by its quarterly inflation report, comes amid signs that Brexit stockpiling has boosted recent economic growth figures.

But this was largely due to “no deal” precautionary stockbuilding ahead of the original 29 March EU departure deadline and relatively mild weather. Economists are predicting a slowdown as the year progresses.

Howard Archer, chief economic adviser to the EY Item Club, said: “The MPC [monetary policy committee] is likely to hold off from hiking interest rates until the Brexit situation becomes clearer and it can see how the economy is responding.

“Indeed, the MPC may see the extension of Brexit as prolonging the uncertainties facing the UK economy and increasing downside risks.”

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