Bank of England raises UK growth forecast, holds rate
The Bank of England on Thursday hiked its economic growth forecast for next year, as it froze its key interest rate at a record-low 0.25 percent and left stimulus unchanged.
London: The Bank of England on Thursday hiked its economic growth forecast for next year, as it froze its key interest rate at a record-low 0.25 percent and left stimulus unchanged.
The BoE raised its prediction for 2017 GDP expansion to 1.4 percent from 0.8 percent, although the improved outlook since August has been clouded by Thursday`s High Court decision to order a parliamentary vote on Brexit.
"In the three months since (August), indicators of activity and business sentiment have recovered from their lows immediately following the referendum and the preliminary estimate of GDP growth in the third quarter was above expectations," the central bank said in a statement.
"These data suggest that the near-term outlook for activity is stronger than expected three months ago."
It added that household spending had grown faster than expected in August, while the housing market had been more resilient.
The announcement came two hours after a ruling that parliament, not the government, must approve the start of Britain`s withdrawal from the European Union, in a landmark decision that could delay Brexit.
Three senior judges ruled that Prime Minister Theresa May did not have the right to use her executive power to trigger Article 50 of the EU`s Lisbon treaty, which begins a two-year countdown to leaving the bloc.
Thursday`s BoE rate decision -- which was widely expected by markets -- was unveiled after governor Mark Carney put an end to speculation over his future on Monday by announcing he would extend his contract for one year to 2019 to aid an "orderly transition" to Brexit.
The BoE had already slashed rates to the current level in August, as part of a post-referendum stimulus package worth up to £170 billion ($212 billion, 191 billion euros).