- Bank of England
The Bank of England's nine-member rate-setting committee voted unanimously to keep interest rates on hold at 0.5% and the size of its bond portfolio at 375 billion pounds. It was the second month in a row policy makers were unequivocal on the decision, after Ian McCaffery, an external member of the Monetary Policy Committee, abandoned his rate hike vote in February referring to a weaker outlook for wages. Despite an increased level of uncertainty and sluggish global demand, policy makers said interest rates were likely to rise rather than decrease in the future to ensure inflation returns to its official target of 2% "in a sustainable fashion," according to the Monetary Policy Committee minutes.
On top of that, the BoE voiced a fresh warning about the Britain's upcoming referendum on membership of the European Union, saying that uncertainty over the outcome may result in slowing the economy in the months ahead of the vote. The central bank said the upcoming vote on June 23 could delay some spending decisions, though it said recent data suggested growth would keep the same momentum this quarter as it had at the end of last year. The BoE's statement marks the first time that officials have explicitly expressed their concern that the looming referendum risks acting as a further drag on growth amid an already challenging global environment.
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