At July’s meeting on Wednesday, only one member of the Monetary Policy Committee (MPC), Gertjan Vlieghe, voted for a cut in the interest rate to a record-low 0.25 percent, while all members backed keeping quantitative easing (QE) stimulus at £375 billion.
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Mr Carney previously warned British families to prepare their finances for a three per cent rise in the coming years.
The Monetary Policy Committee voted 8-1 to leave rates unchanged, however this does not rule out further economic measures at a later stage if the Bank of England determines the economy requires stimulation to ride out any impact that Brexit might have.
“To that end, most members of the Committee expect monetary policy to be loosened in August”, the BoE said in a statement.
The UK market reacted badly to the Bank of England decision not to cut interest rates and again failed to hold above the 6,700 level despite robust worldwide sentiment.
Following the announcement that interest rates were maintained at 0.5 per cent, sterling rose 2.7 per cent against the dollar, to reach $1.347, before dropping back to a 1.5 per cent gain on the day at $1.33.
The MPC raised its expectation for economic growth in the April-June period – only a few days of which fell after the referendum – to 0.5 per cent from a previous forecast of 0.3 per cent. While the central bank said it discussed what measures it could use to help the economy, it stopped short of detailing what those might be.
The bank said it was too soon to know the full impact of the Brexit vote – even though the housing market already shows signs of struggling and business confidence has plummeted.
This, they say, is owing to Theresa May’s quick appointment as prime minister having reduced some of the political uncertainty that has gripped Britain since the shock referendum result.
Analysts suggest there could for example be some more cash stimulus pumped around the British economy to encourage lending by commercial banks. Initial reports suggest economic activity is likely to weaken in the near term, the minutes said.
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Jeremy Cook, chief economist at global payments company World First, agreed the MPC was giving itself more time to study economic data following the European Union vote.
