Bank of England votes to keep interest rates unchangedStaff writer ▼ | February 4, 2016
The Bank of England voted unanimously to keep interest rates unchanged on Thursday amid low inflation and weak global growth.
United Kingdom The BoE now expects gross domestic product to rise by 2.2%
In the Inflation Report released alongside the monetary policy announcement and the meeting minutes, the BoE cut UK economic growth forecasts. The BoE now expects gross domestic product to rise by 2.2% this year, down from 2.5% in its previous estimates. The central bank also slashed its growth forecasts for 2017 to 2.3%, down from an earlier estimate of 2.6%.
The Inflation Report warned that global growth had slowed further over the past three months, dragged by flagging emerging economies, particularly the slowdown in China.
The report also highlighted that wage growth has been weaker than anticipated and labour costs were expected to rise a "little less quickly than thought at the time of the November Inflation Report".
The BoE noted that 12-month CPI inflation stood at 0.2% in December, almost 2 percentage points below the inflation target of 2% as oil prices were more than a third lower, in sterling terms, than a year earlier. ■