The Bank of England confirmed that their new policies following the interest rate fall, now gives the economy a significant strenght caused by the Brexit.
It recently announced that the base interest rate would not change after the chronicle fall of 0.25% last month in a bid to reduce the fall-out of our EU (European Union) plebiscite.
Citizens still fear that this Brexit caused fall might go even lower, which would be very bad especially for those using savings accounts and relying on their pension funds.
However, looking at what the Monetary Policy Committee (MPC) meeting showed, it means that this is the first time members voted unanimously to keep rates the same after last month’s Brexit historical cut, the first ever experienced since 2009.
Those making Policy said that the immediate impact of the Brexit vote was not quite as bad as initially expected.
Though, a little slow down is still witnessed, but not as bad as the bank predicted in their August forecast.
They predicted the growth to be in state of flatline between July and September.
The bank said in respect to their recent policies, they are expecting a ‘less slow down in the UK gross domestic product (GDP) growth’ in the middle of 2016.
McDonald said that the economy was still set to suffer a material slow down in growth, with an estimation that suggests that growth will slow down to between 0.2′ and 0.3′.
If This slow down occurs, it will be a very speedy slowdown compared to the 0.6% growth seen in the previous three months.
But it is still a better solution to reduce the economic activities, which is usually a good step, if not the best attempt to revive a dying economy that is on decline just like the one that followed Brexit.
The MPC confirmed that industry data now suggest most of the economy sectors have bounced back greatly especially in August. It affirmed that the slowing down rate were somewhat less compared to the previous month’s rate.
Either way, the UK (United Kingdom) government is not in hurry to start-up negotiations about leaving the EU (European Union) or to leave the single market which is likely to be reason investors haven’t left, maybe Brexit ideology must be on a hold for now.