News emerged only yesterday that the Bank of England has decided to keep interest rates on hold at 0.75%.
With last week’s general election out of the way, UK politics can now turn its attention back to resolving the Brexit induced political and economic uncertainty to hit the United Kingdom.
Dr Kerstin Braun, President of Stenn Group, which is an international provider of trade finance head quartered in London, has provided a comment on the Bank of England’s decision to hold interest rates.
“Boris Johnson’s win provides the much-needed solidity the UK has been craving. Businesses can begin to see their future and now Brexit is confirmed to go ahead, The Bank of England needs to keep the economy steady as we navigate Britain’s exit from the EU. But a prolonged period of low growth, low inflation, and low interest rates will limit the Bank’s ability to create stimulus when needed.”
“It’s unlikely trade will be decided until the end of 2020 so it’s vital UK firms start investing again as they exit Brexit limbo. This is critical for long-term growth. With Europe mired in low growth and a modest global economic outlook for 2020, global demand will be weak as companies rev up their engines. The recovery will be slow, with GDP growth estimated to be 1% in 2020,” the President of Stenn Group continued.
Dr Kerstin Braun said: “The UK economy has been flatlining this year, but the pound surged to its largest amount in a decade after a clear majority was announced, and it’s expected Sterling could rally next year to a pre-referendum level of $1.45. We expect consumer spending to pick up gradually, but with elevated levels of household debt, the consumer can’t keep the economy afloat forever. Unemployment is down but wages aren’t keeping pace.”