THE Bank of England has warned that uncertainty over the EU referendum could hit UK growth as it marked seven years of record low interest rates yesterday by keeping borrowing costs on hold once more.
Members of the Bank's Monetary Policy Committee (MPC) said the forthcoming vote on EU membership may "delay some spending decisions and depress growth", after pinpointing Brexit fears as the possible cause for the recent fall in the value of the pound.
The comments came as all nine policymakers on the MPC voted to leave rates at 0.5 per cent - where they have remained since March 2009 - and keep its quantitative easing programme on hold at £375 billion.
Minutes of the meeting also showed the MPC 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" in order to meet its inflation target of 2 per cent.
Experts are predicting the Bank will keep rates on hold at 0.5 per cent until 2017.
The decision to keep rates on hold comes after the Office for Budget Responsibility (OBR) slashed its growth forecasts for the UK economy in Chancellor George Osborne's Budget on Wednesday.
It downgraded its forecast for gross domestic product (GDP) from 2.4 per cent to 2 per cent this year, from 2.5 per cent to 2.2 per cent in 2017.
It said its forecasts for the UK economy were impacted by concerns over the global economy and its decision to revise down its expectations for productivity growth, which measures the amount of output the economy can produce against the number of hours worked.
The MPC said it would analyse the announcements in the Budget during its preparation for its report in May.
