Bank of England lowers UK growth forecasts for 2019, 2020

The central bank’s monetary policy committee said August 1, 2019, the British economy was now on target to grow by 1.3 per cent in 2019 and 2020, down from the previous forecast of 1.5 and 1.6 per cent respectively. — Reuters pic
The central bank’s monetary policy committee said August 1, 2019, the British economy was now on target to grow by 1.3 per cent in 2019 and 2020, down from the previous forecast of 1.5 and 1.6 per cent respectively. — Reuters pic

LONDON, Aug 1 — The Bank of England lowered its near-term economic growth forecasts today amid continued uncertainty over Brexit, while warning that a “no deal” exit from the EU would hit growth and the pound.

Members of the central bank’s monetary policy committee held the key interest rate at 0.75 per cent.

In an accompanying inflation report, the committee said the British economy was now on target to grow by 1.3 per cent in 2019 and 2020, down from the previous forecast of 1.5 and 1.6 per cent respectively.

But these assume a “smooth adjustment” to Britain’s looming departure from the European Union, and the committee noted an increase in perceived risk that this will not be the case.

Boris Johnson took over as Britain’s prime minister last week, promising to deliver Brexit on the next scheduled departure date of October 31, with or without a deal with Brussels.

“In the event of a no-deal Brexit, the sterling exchange rate would probably fall, CPI inflation rise and GDP growth slow,” the minutes of the committee’s latest meeting said. — AFP