Money Minute Monday 27 January: Brexit and interest rates

published 27 January 2020

This week, on Friday, Britain officially leaves the European Union. We then move to a transition period during which Britain and the EU will attempt to finalise their future relationship. Currently, the deadline for finalising that deal is the end of this year. So while this may be the end of the beginning for Brexit, it won’t be falling out of the headlines just yet.

Perhaps more important for UK investors this week though, is the Bank of England’s next monetary policy decision. This will be announced on Thursday. The decision is finely balanced. Many analysts think the Bank might cut the key interest rate from 0.75% to 0.5%.

However, the stronger-than-expected survey data from the manufacturing and services sectors that we saw on Friday just past might stay the Bank’s hand.