Interest Rates Frozen as UK Economy Worst Year Expected for 10 Years

The Bank of England has reported the slowest growth this year since the 2009 recession. In November last year the Bank offered growth forecasts of 1.7% for 2019 and downgraded to 1.2%

As the uncertainty over Brexit continues the interest rate has been maintained at 0.75% pa.

The Bank of England highlighted that businesses are being careful due to the uncertainty of Brexit with reduced growth rates in exports, a reduction in business investment and house building.

They fear the economy may fall into a recession around the second half of the year, with business already putting strategies into place should there be a No Deal Brexit.

Mark Carney Governor of the Bank of England said: “uncertainty over Brexit is causing business to be cautious and there is added pressure on the economy”.

Brexit on Mortgages

Uncertainty is putting buyers on hold even though there are some tempting mortgages including 5-year fixed mortgage deals below 2%.

Brexit on Savings

Unfortunately for people with savings, investors continue to be disheartened with low interest rates.

Brexit on Jobs

Brexit does not seem to be affecting jobs.  The unemployment rate is currently 4% and employees average hours worked and wage growth was rising towards the end of last year.

The Bank of England suggests an increase in the next few years in wages as unemployment rates continue to drop and predicts over the next 3 years earnings inflation to go up more than 3%.