The Bank of England governor Mark Carney has frozen interest rates at 0.75%, however, latest forecasts suggest that rates could rise to 1.5% over the next three years.
Carney also issued a warning that there is no guarantee it would cut interest rates to support growth and jobs under a disorderly Brexit.
Furthermore, he indicated there could be an acceleration of interest rate increases if the UK manages a smooth exit from the European Union.
In a statement, the governor said: “Since the nature of EU withdrawal is not known at present, and its impact on the balance of demand, supply and the exchange rate cannot be determined in advance, the monetary policy response will not be automatic and could be in either direction.”
Analysis: Business Growth Expert and Yomdel CEO, Andy Soloman
It’s great to see the Bank of England hold its nerve and keep interest rates static at 0.75%. This should deliver yet another boost for UK business off of the back of a favourable Autumn Budget for smaller bricks and mortar retailers, in what has otherwise been a testing year at times.
While the Budget failed to deliver from a property point of view, this continued affordability of mortgage rates should at least sustain a muted level of buyer demand and keep an otherwise sluggish market on life support for the remainder of the year.