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Bank of England holds interest rates as it waits for Brexit outcome
Last Updated: 2018-12-21 15:04 | Xinhua
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Brexit uncertainties are weighing on British economic growth, the central bank, the Bank of England (BoE), said on Thursday as it chose to hold interest rates level.

All nine members of the BoE's rate-setting Monetary Policy Committee (MPC) voted to keep the bank rate at 0.75 percent.

Members highlighted in their report that uncertainties over Britain's exit from the European Union (EU) had "intensified considerably" over the past month since the MPC's last meeting.

"These uncertainties are weighing on UK financial markets," the MPC minutes said.

"The broader economic outlook will continue to depend significantly on the nature of the EU withdrawal, in particular the form of the new trading arrangements between the EU and the UK."

The financial sector now faced new and significant pressures as a result of the uncertainty over the Brexit outcome.

Bank funding costs and non-financial high-yield corporate bond spreads had risen sharply as a response, and that rise had been more than in other comparable advanced nation economies.

At the same time, UK-focused equity prices had fallen, and sterling had suffered further falls on top of the large readjustment seen at the moment of the Brexit referendum in June 2016 which saw the pound lose more than 20 percent of its value against the U.S. dollar.

The BoE said that these uncertainties now negatively affected the short-term economic forecast.

"Business investment has fallen in each of the past three quarters and is likely to remain weak in the near term," the BoE said, adding that Brexit uncertainties could lead to "greater-than-usual shorter-term volatility" in economic data.

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