March 2019 is a momentous month for United Kingdom as it will finally lead to the Brexit that many have voted in favor of. In preparation, the Bank of England decided to retain its interest rate which is currently at 0.75 per cent. Banker Leonardo Gonzalez Dellan understands that the decision that was made unanimously by the monetary policy committee or MPC was done for the welfare of the financial institution.
According to the MPC, it is expected that the economy of the United Kingdom will grow between 0.5 to 0.4 per cent in the third quarter of this year. The credits are better for these months compared to the spending recorded during the summer season.
Despite it all, looking at the minutes recorded during the meeting, there is only a small amount of data that indicates major changes. There are, however, many uncertainties as to the result of the Brexit in terms of the financial markets. MPC also noted that there are higher downside risks because of the trade battles that were recently started by the president of the United States, Donald Trump.
According to the meeting’s minutes, the economies of the emerging markets have shown very little proof that there is upcoming growth and in some of the cases, there are markets that have tightened their policies because of their worsening financial conditions.
There are also expected repercussions because of the protectionist measures that were taken by China and the United States. These measures are believed to cause a bigger negative impact on the growth of the economy internationally which was originally not seen as anything bad during the August Report.
The last time that the Bank of England decided to raise its rates, it was during the August Report. After which, their rate has stayed higher than 0.5 per cent for the first time in nearly 10 years. Many of the economists believe that that was the last increase that the bank is going to allow before the much awaited Brexit this coming March. Because of the withdrawal from the EU, Leonardo Gonzalez Dellan said that the bank will be impacted depending on how the financial markets and the businesses react to the exit.