Responding to the Bank of England’s decision to leave interest rates unchanged at 0.75%, Tej Parikh, Senior Economist at the Institute of Directors, said:
“Facing a Schrödinger’s Brexit in just over a week, the Bank of England continues to have its hands tied on interest rates.
“It’s virtually impossible for the Bank to make clear decisions right now while the various unknowns surrounding the future path for the economy linger. The desire to gradually normalise interest rates from their low levels is already complicated by improved wage growth on one side and weakening economic growth on the other, notwithstanding calculations over the Brexit process. All eyes will now be on any potential further communications from the Bank on how it might support liquidity and confidence in the event of a possible no deal.
“The difficulty for the MPC in outlining its plans for interest rates is just another example of how political uncertainty has paralysed the UK’s domestic economic policy.”