Bank of England chops second quarter growth forecast, sees bigger global and Brexit risks

The Bank of England cut its growth forecast for Britain’s economy to zero in the second quarter of 2021 and highlighted risks from global trade tensions and growing fears of the no-deal Brexit.

BoE officials voted unanimously to hold rates of interest at 0.75%, as expected, and stuck for their message that rates will have to rise in a restricted and gradual fashion, assuming Britain can avoid a damaging no-deal Brexit.

However, the BoE noted on Thursday a darkening global outlook which has already prompted the European Central Bank, U.S. Federal Reserve and Bank of Japan to signal this week more stimulus could be in route.

Britain’s economy is now on the right track to stagnate in the second quarter, the BoE said, instead of grow 0.2% quarter-on-quarter because it had predicted last month, citing the run-up in stockpiling earlier this year by many people companies in front of an authentic Brexit deadline in March.