The Bank of England has postponed any increase in interest and has put rates on hold at 0.75%.
The financial giants have hinted that the cost of borrowing may decrease if global economic growth fails to recover or if Brexit uncertainties continue, but it´s expected that the UK economy is expected to regain its strength.
The Bank´s Monetary Policy Committee (MPC) voted 7-2 in favour of keeping the official rate at a standstill while it monitors companies´ and households´ reactions to Brexit and global growth.
The agents who perform regular checks to observe regional economic activity around the UK recently gave the construction sector the lowest score in six-and-a-half years. The agents also specified failing manufacturing exports with car-making suffering the most.
As household spending continued to grow steadily, business investment and export orders had remained weak.
Third-quarter gross domestic product (GDP) growth was 0.3%, “a little weaker” than the Monetary Policy Committee (MPC) predicted back in November. The fourth quarter is also expected to be even weaker with an estimated growth of 0.1%.
The MPC now expects inflation to subside to 1.25% in the spring which largely shows the construction sector´s weakness.
The committee released a statement that said: “If global growth fails to stabilise or if Brexit uncertainties remain entrenched, monetary policy may need to reinforce the expected recovery in GDP growth and inflation”.
Two experts on the nine-member panel, Jonathan Haskel and Michael Saunders, said the weakness of the economy warranted an immediate reduction to 0.5%, however, the remaining seven, including the bank´s governor, Mark Carney, voted to leave borrowing costs unchanged at among the lowest levels on record.