The Bank of England has left interest rates unchanged at 0.5% in a move which was widely anticipated by economists.
Ed Hutchings, UK sovereign portfolio manager at Aviva Investors, said the decision was “at first glance, a modestly dovish one.”
The outlook for both gilt yields and the currency is dependent on the state of Brexit negotiations and the incoming domestic data, he said.
But Craig Inches, head of rates and cash at Royal London Asset Management, said the bank had missed another opportunity to raise rates.
“Despite a run of soft data, the economy may turn out to be more robust than recent evidence, and the Bank’s newly lowered forecasts, suggest,” he said.
Professor Peter Urwin, director of the Centre for Employment Research, said the decision to hold rates down had not been a foregone conclusion.
He commented: “The manufacturing sector is still growing, and interest rate rises are needed to get back to normal monetary conditions – inflation of 2.5% does not change this.”
Urwin added that as the Brexit rollercoaster is moving forward some benefit from continued growth in the global economy would be felt.
But the bank’s caution is not expected to last indefinitely.
“Unless the economic news worsens significantly or the Brexit negotiations collapse, we are still set for rises over the coming year,” Urwin said.
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