The Bank of England (BoE) have announced their decision to leave interest rates on hold, after raising them for the first time in 10 years last month.
Members of the Monetary Policy Committee (MPC) voted unanimously to keep rates at 0.5 percent.
Back in November, the MPC raised rates from the record low of 0.25 percent, after considering consistently low levels of unemployment, rising inflation and the stronger global economy.
However, the decision to keep rates at the same level was attributed to pound sterling weakness, with inflationary levels going above the Bank’s target of 2 percent.
According the MPC’s minutes, the central Bank noted:
“It remains the case that inflation has been pushed above the target by the boost to import prices that resulted from the past depreciation of sterling. The MPC judges that inflation is likely to be close to its peak, and will decline towards the 2 percent target in the medium term”.
In light of a mixed outlook on the British economy and fears of a downturn as 2017 draws to a close, also weighed upon the decision.
The Bank of England has also decided to maintain its current quantitative easing programme, which has acquired around £435 billion of government debt and £10 billion worth of corporate bonds.
Conversely, back in October the European Central Bank (ECB) moved to slash its bond-buying programme to aid Eurozone recovery.
The European quantitive easing stimulus however, is expected to continue until September as the Bank look to implement the policy gradually.
MPC holds #BankRate at 0.50%, maintains government bond purchases at £435bn and corporate bond purchases at £10bn. pic.twitter.com/mrA5UcxxeY
— Bank of England (@bankofengland) December 14, 2017
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In addition, the Bank pointed to ongoing Brexit negotiations as the biggest source of insecurity for the British economy.
Theresa May is set to head to Brussels to meet with her fellow European leaders, after having lost a key vote on an EU bill in the commons.
Various Tory rebel MPs backed an amendment ensuring a legal guarantee of a vote on the final Brexit deal.
The pound sterling traded at $1.3427, from $1.345 ahead of the news, having been minimally affected by the decision.