Jan 31, 2020 - Economy

Bank of England holds interest rates steady before Brexit

Governor of the Bank of England Mark Carney

Governor of the Bank of England Mark Carney. Photo: Jonathan Bradt/POOL/AFP via Getty Images

The Bank of England held interest rates at 0.75% Thursday as governor Mark Carney, in his final policy meeting, said "the most recent signs are that global growth has stabilized."

Yes, but: The BOE cut its growth expectations for Britain to 1.1% for the next three years, down from 2019's 1.4%. The projections are England's lowest since World War II.

  • “We no longer expect much of a pick-up [in productivity growth],” Ben Broadbent, BOE deputy governor for monetary analysis, said after the meeting.

Between the lines: Markets had priced in a 50% chance the central bank would cut rates after a string of unimpressive data, including its latest GDP report showing Britain's economy shrank by 0.2% in the second quarter and grew by just 0.4% in the third.

The big picture: The decision came just a day before Britain exits the European Union. The British pound moved to over $1.31 against the dollar and government bond yield rose.

Go deeper: Boris Johnson: U.K. has crossed the Brexit finish line now bill is ratified

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