The Bank of England has marked seven years of record low interest rates by keeping the cost of borrowing on hold once again.
All nine policymakers on the Bank’s Monetary Policy Committee (MPC) voted to keep rates at 0.5%, where they have remained since March 2009.
The MPC said “little had changed” in its outlook for growth since it slashed its economic forecasts last month and warned the UK was being buffeted by “unforgiving” conditions in the global economy.
It also said there appeared to be “increased uncertainty” about the forthcoming referendum on the UK’s membership of the European Union, which caused the value of sterling to plummet against the dollar.
It said: “That uncertainty is likely to have been a significant driver of the decline in sterling. It may also delay some spending decisions and depress growth of aggregate demand in the near term.”
It also said the boost for the EU economy from improving credit conditions and lower oil prices was likely to fade, “placing more of a burden on policy to support demand”.
The committee also stood by its stance that the next move for rates would be a rise rather than a cut, stating “it was more likely than not that Bank Rate would need to increase over the forecast period” to meet its inflation target of 2%.