The Bank of England has cut its UK growth forecast and warned a lack of Brexit clarity is hitting the economy. The Bank said uncertainty over the UK's departure from the EU had "intensified considerably" over the past month.

Against a backdrop of weaker global growth, the Monetary Policy Committee (MPC) voted unanimously to keep interest rates at 0.75%. It said the economy was likely to grow by 0.2% in the final quarter of 2018, down from an earlier forecast of 0.3%. That follows growth of 0.6% in the previous quarter. The Bank expects slower economic growth to continue this year. But In the latest from the Bank of England's interest rate setters, it's not what they did that's eye-catching - interest rates stayed the same.

It's what they said: "Brexit uncertainties have intensified considerably since the last meeting." You probably also knew sterling has depreciated further and is more volatile. What you might not have known is that it's costing banks more to fund themselves - i.e. to borrow cash - and it's also costing corporations more in interest to borrow funds from international investors. Businesses are investing less and most commentators believe it's likely to stay that way for months.

About the Author: Glen Callow

Prime Accountants News Centre

Do you need to talk to us about any of the news, information or resources on our website?