Bank of England leaves interest rates unchanged

18 December 2017

The Bank of England has taken the decision to leave the interest rates unchanged this month, following the increase last month from 0.25 per cent to 0.5 per cent.

The Telegraph has reported that this decision was taken as banks believe that Brexit-fuelled inflation was 'close to its peak' and would begin to ease back as the year ends and would be moving towards the 2 per cent target set previously after hitting 3.1 per cent in November.

The bank also said that different economic indicators suggest that growth was slowing down. It also expects gross domestic product growth in the fourth quarter to come in 'somewhat below' the previous quarter's 0.4 per cent even though global growth remains strong.

Economists suggest that they still believe pay growth - which has lagged behind inflation for seven months in a row - would start to rise next year, but stressed 'uncertainties' around this remained and they reiterated that Brexit remained the biggest cause for uncertainty for the UK economy.