Bank of England Governor, Mark Carney talks with British Chancellor of the Exchequer Philip Hammond during the G20 Finance Ministers and Central Bank Governors Meeting, Saturday, June 8, 2019, in Fukuoka, Japan. (Kim Kyung-hoon/Pool Photo via AP)

UK central bank holds rates amid Brexit, trade uncertainty

June 20, 2019 - 7:22 am

LONDON (AP) — The Bank of England kept its main interest rate on hold at 0.75% on Thursday as rate-setters said a combination of Brexit worries and global trade tensions were weighing heavily on growth.

All nine members of the Monetary Policy Committee backed the decision to not change rates. There had been some expectations in the markets that a couple of members could vote for an increase in rates because of concerns that rising wages will lead to higher inflation.

However, worries about the economic outlook due to uncertainty surrounding Britain's departure from the European Union held sway and will likely determine policy for the next few months.

Britain's departure date from the EU has been delayed to Oct. 31 but there is still huge uncertainty as to whether the country will leave then. The Conservative Party contest to replace Prime Minister Theresa May has meant there's been little progress on Brexit in recent months and concerns are rising that Britain could crash out without a deal on future relations with the EU.

Most economists, including those at the Bank of England, think that will cause huge damage to the British economy as tariffs and other disruptions are imposed on trade between Britain and the EU.

"Domestically, the perceived likelihood of a no-deal Brexit has risen," rate-setters said in the minutes to their policy meeting.

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