LONDON – The Bank of England has decided to keep its main interest rate at a record low of 0.25 percent as the economy weakens ahead of Britain's departure from the European Union.
The policymakers erred on the side of caution Thursday after economic growth more than halved to 0.3 percent in the first quarter compared with the three months.
The bank's governor, Mark Carney, has said volatility and uncertainty would govern the process of Brexit, even though negotiations have yet to begin.
The pound has been volatile since the June 23 vote, at one point losing a fifth of its value. That's pushing up inflation, to 2.3 percent currently.
Alan Clarke at Scotiabank has predicted that despite the pound's recent rebound, inflation will rise above 3 percent this year.