Bank of England warns of slowdown in growth next year as it keeps rates low


The Bank of England warned signs of a new year slowdown in growth were emerging as it capped a dramatic year for the UK economy by keeping interest rates on hold.

Policymakers said while growth had been "remarkably steady" since the Brexit vote shock, cracks were starting to show in the business sector as firms put investment decisions on hold.

All nine members of the Bank's Monetary Policy Committee (MPC) voted to keep rates at 0.25% in the last decision of the year.

It comes after the US Federal Reserve hiked rates last night for the first time since December 2015 and signalled three more rises in 2017 as America's economy continues to strengthen.

Britain's economy is expected to grow by 0.4% in the fourth quarter, down from 0.5% in the previous three months, according to the Bank.

But minutes of the meeting confirmed growth in 2017 was set to falter, with recent surveys highlighting uncertainty among businesses ahead of the Brexit negotiations.

"Forward-looking components of business surveys were weaker than those regarding current output," according to the MPC minutes.

"Some slowing in activity was therefore in prospect during 2017," the MPC added.