Bank of England to hold rates

LONDON: Above-target inflation won´t push the Bank of England to tighten monetary policy this year or next as it waits to see if wage increases catch up with price rises and how divorce talks with the European Union pan out, a Reuters poll found.

Britons voted just over a year ago to leave the EU and envoys on Monday began a first round of negotiations on the terms of the split before Britain departs - with or without a deal - at the end of March 2019.There is still little lucidity on what tone the talks will take but several Reuters polls over the past few months have concluded that fractious negotiations would be the worst outcome for both Britain´s economy and sterling. "We expect the exit negotiations to be bumpy," economists at Morgan Stanley wrote in a note to clients.

"We see MPC action as dependent on economic performance (and) we assume that the economy will slow and keep them on hold despite inflation overshooting the target. "The medians in the poll  said the Monetary Policy Committee would hold Bank Rate at its record low of 0.25 percent until 2019.