Britain’s central bank believes households and companies are going to feel reassured by past week's advances in negotiations on Brexit. The EU said that satisfactory advances had been made in talks and they could be pushed to the next phase, it also agreed to start a transition period in 2019.
That is going to lower the risks of Britain leaving the block in disarray. The Bank of England has confirmed its readiness to hold interest rates at 0.5%.
According to the Bank since the last gathering in November two major events have taken place, these are the Autumn Budget and advances in negotiations on Brexit.
The Monetary Policy Committee says that past week's accord between Britain and the EU would lower the risks of Britain leaving the EU in disarray, and will reassure households and companies. Together with that it says that the response of households and markets to the evolution of Brexit negotiations has the strongest impact on economic future and carries possible uncertainty for it.
Recently MPC officials have also assessed the possible effect of the Autumn Budget. Their common view is that it is going to add 0.3% to GDP by 2020, as Philip Hammond loosened the grip on austerity measures.