The Bank of England maintains rates at 0.75% for fears about the "brexit"

The Bank of England maintains rates at 0.75% for fears about the "brexit"

The Bank of England left today unchanged, at 0.75%, the interest rates in the United Kingdom and its stimulus program, and warned of a slowdown in the economy greater than expected by the "Brexit".

After its periodic meeting, the monetary policy committee chose to keep the price of money unchanged in the face of an economic shock depending on "how" – with or without agreement – the country leaves the European Union (EU) next 29 of March.

The entity did not vary either its economic stimulus program, with which since 2009 has allocated 445,000 million pounds (492,000 million euros) to the purchase of bonds of private debt and, above all, sovereign.

The bank warned that "the intensification of the uncertainty related to the 'brexit', by the greater possibility of an exit not negotiated within three months," weighs "on the forecast of economic growth.

The institution now estimates that the gross domestic product (GDP) will increase only 0.2% in the last quarter of this year, compared to its previous forecast of 0.3% and the 0.6% recorded in the previous period, and predicts that growth will remain low in 2019.

It also foresees that inflation, currently at 2.3%, will fall below 2% in January, although later it would recover, and warned that, in case of a hard "brexit", rates could be lowered or raised, in function of the sectors affected.

In a report to Parliament last November, the Bank of England predicted that, in the worst scenario of the "brexit" -a steep exit without agreement or transition period, GDP could fall by 8% over current levels and the pound would drop by 25%, plunging the United Kingdom into a recession.

If, on the other hand, everything stays in order, the entity forecasts a growth of 1.3% in 2018 and 1.7% in 2019, while the British Government expects an expansion of 1.3% this year and a 1.6 next.


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