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Bank of England votes to leave interest rates unchanged

Bank of England votes to leave interest rates unchanged
Britain's central bank voted 7-2 to leave interest rates alone, citing strong, albeit vulnerable, economic health. File Photo by Andy Rain/EPA-EFE

Jan. 30 (UPI) -- The Bank of England's monetary policy committee voted Thursday to retain its key bank lending rate at 0.75 percent, noting signs of a rebound in the British and global economies.

The committee's decision to maintain the current interest rate was not unanimous, coming in a 7-2 vote. Some analysts, however, had expected an even closer vote in BOE Governor Mark Carney's final rate-setting meeting before leaving the job.

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Expectations for a possible rate cut had been rife because of slower British economic growth in 2019 due to weaker global activity and uncertainties over Brexit. Britain had also missed its target for "healthy" inflation of 2 percent, posting an inflation rate of only 1.3 percent in December.

The majority of the committee instead focused on new indications of a rebound in the domestic and international economies.

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"The most recent indicators suggest that global growth has stabilized, reflecting the partial easing of trade tensions and the significant loosening of monetary policy by many central banks over the past year," the central bank said in a statement.

The central bank also cited upticks in global business confidence and manufacturing indicators and pointed to "receding near-term uncertainties" in Britain.

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Carney told reporters that although economic conditions are positive enough to warrant maintaining the current rate, things could change quickly.

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"Though the global economy looks to be recovering, caution is warranted," he said. "For example, a renewal of trade tensions could reverse recent progress."

The Bank of England decision came a day after the U.S. Federal Reserve also decided Wednesday to leave rates unchanged.

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