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:
“The Bank is right not to rock the boat, as political uncertainty lingers.
“Businesses are facing mounting cost pressures from higher wages, rising oil prices, and regulation, which may push price levels up in the future. As inflationary forces firm up, the case to raise interest rates may grow, but a hike would still be a bit of a blind bet before there is further clarity on the nature of Brexit. Right now, with economic growth looking sluggish and recently propped up by stockpiling, low interest rates remain a significant source of support for business confidence and consumer spending.
“The normalisation of interest rate setting is another casualty of the elongated Brexit withdrawal process, which leaves the Bank with little other choice than to maintain a holding pattern for now.”