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Bank of England keeps rates steady amid Brexit concerns

Published:Friday | March 18, 2016 | 3:00 AM

Bank of England keeps rates steady amid Brexit concerns

The Bank of England opted to keep interest rates at a record low 0.5 per cent on Thursday amid fears about global growth and uncertainty over a popular vote on whether Britain should leave the European Union.

Policymakers have kept the rate steady for seven years and many analysts believe they are unlikely to budge until next year. Market volatility in China, trouble in the oil industry, and fears about a British exit from the EU have weighed on growth outlook.

The minutes to the Bank of England's policy meeting show the decision to keep rates on hold was unanimous and that policymakers find "it is more likely than not that" the key interest rate will need to increase. Considering the range of risks to the economy, however, they said the rate increases would be gradual.

The policymakers noted that uncertainty over the UK vote on EU membership "may also delay some spending decisions and depress growth of aggregate demand in the near term".

Bank of England Governor Mark Carney had previously said the central bank could respond to the growing economic headwinds with more stimulus measures, but would not follow Japan in cutting rates below zero.