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BOE Revises Growth Forecasts And Maintains Rates After Brexit Delay

The BOE (Bank of England) held interest rates stable after the deal to extend the target for the UK’s exit from the EU (European Union) until October. The nine-member MPC (Monetary Policy Committee), headed by Governor Mark Carney, voted collectively to maintain interest rates unmodified at 0.75%. This was the first meeting of the MPC after Theresa May—Prime Minister of the U.K.—along with the EU leaders settled on to the Brexit extension. The BOE revised up its 2019 development estimate from 1.2% to 1.5%, as first-quarter GDP (gross domestic product) growth is anticipated to have advanced from 0.2% to 0.5% in the fourth-quarter of 2018, stronger than estimated in its February report.

The BOE also mentioned better than anticipated progress in Eurozone, the U.S., and China as contributing to its more positive outlook. During a press conference after the announcement, Carney repeated that interest rates might have to surge faster than the market presently anticipates over the forecast horizon. He said, “If the world unfurls broadly as steady with this forecast, then it would need greater removal of monetary stimulus than is presently implied, it just did not need at this meeting.” The BOE’s committee voted collectively to uphold the stock of sterling non-financial venture-grade corporate bond procures, backed by the delivery of central bank reserves, at $13 Billion (£10 Billion), and to uphold the stock of the U.K. administration bond purchases at £435 Billion.

Related to Brexit, recently, it was stated that the planned exit of the U.K. from the EU has given London home purchasers the biggest discount in a decade. Homebuyers took benefit of Brexit insecurity to get high discounts in London’s posh neighborhoods in the first quarter. The prices for homes below $2.6 Million (2 Million pounds) in the capital’s most sought district fell most in a decade in the last 3 Months throughout March as politicians missed to agree on an agreement for the UK’s orderly departure from the EU.

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