British Central bank foresees Lowest economic Growth Since 2009. The British central bank expects the lowest economic growth in ten years. Bank of England (BoE) expects 1.2% growth by 2019, while the forecast was 1.7 percent in November.
The central bank has altered the estimate because of the uncertainty associated with the approaching Brexit.
“Brexit’s fog leads to tensions and uncertainty among British households”, stated the chairman of the British central bank Mark Carney on Thursday.
BoE holds the most significant interest rate because of the uncertainty at 0.75 percent.
In August this rate was raised by 0.25 percentage point.
The central bank had already said in December that the uncertainty surrounding the Brexit had increased considerably.
In the lack of an agreement with the European Union, the British economy can get a big hit.
The central bank also anticipates inflation to fall below 2% in the coming months when the Brexit takes effect.
The forecasts for investments were also adjusted downwards.
This year, the BoE is counting on a decrease of 3 percent. Then the investment drive will pick up again.
No progress in discussions between May and Juncker
The uncertainty surrounding Brexit did not diminish on Thursday,
after a meeting between British Prime Minister Theresa May and President of the European Commission Jean-Claude Juncker.
May and Juncker said that they had a “robust and constructive” conversation in their effort to get out of the impasse around the Brexit treaty.
The European Commission does, however, state in a statement that it will not break open the divorce treaty for new negotiations.
The parties acknowledged that their teams would continue to negotiate about whether a solution can be found,
that can count on the highest possible support in the British Parliament. Another meeting will follow this month.