The Bank of England (BoE) voted to keep interest rates at 0.5% by 8-1 yesterday.
The Bank had been widely expected to cut the rate to 0.25%, following a rise in uncertainty in the market caused by the vote to leave the UK.
The decision to leave the EU saw the pounds value decline steeply. The FTSE 250 also tumbled although the market has somewhat recovered in the intervening weeks since the vote.
Explaining why it hadn’t cut the interest rate, the BoE noted that markets have functioned well, and the improved resilience of the core of the UK financial system and the flexibility of the regulatory framework have allowed the impact of the referendum result to be dampened rather than amplified.
Despite this, the bank said there had been preliminary signs that the referendum result had affected sentiment among households and companies, with some businesses looking to delay investment projects and recruitment decisions.
Overall, the majority of the BoEs Monetary Policy Committee said they expected monetary policy to be loosened in August, but that at the moment it would be appropriate to leave t it unchanged for the present.
