LONDON – The Bank of England has voted to keep interest rates on hold amid concerns about whether Britain will leave the European Union.
The June 23 referendum has added uncertainty to an already weakening economic outlook, prompting some economists to downgrade their growth forecasts.
The International Monetary Fund on Tuesday warned that an exit from the EU could disrupt trade and damage the world economy. As a result, the IMF cut its forecast for U.K. economic growth this year to 1.9 per cent, from 2.2 per cent.
Also, consumer price inflation remains muted, so few economists predict an interest rate increase this year. While Britain’s inflation rate unexpectedly rose to 0.5 per cent in March, the highest in 15 months, the rate is still far below the Bank of England’s 2 per cent target.