The Bank of England (BOE) kept interest rates on hold last week notwithstanding the June 23 referendum. The central bank’s Monetary Policy Committee (MPC) voted against cutting interest rates and kept its benchmark interest rate at a record low of 0.5 per cent. The BOE said a rate cut might still be considered next month. Many economists had expected a rate cut of 0.25 per cent as data indicated that the UK’s economy was already slowing prior the Brexit vote.

Meantime, Britain’s new Prime Minister Theresa May vowed to lead a “one-nation government” committed to social justice while making “Britain a country that works for everyone”.

Referring to the difficult debates that the country will be facing to exit from the European Union, she said: “We face a time of great national change.” She also stated that Britain would “rise to the challenge” and would forge “a bold new positive role” in the world.

Finally, the European Commission has reduced its growth projections for the eurozone and Britain. The Commission forecasts that Britain will be mostly hit after the decision to leave the European Union. It said that the UK’s GDP is expected to be between one and 2.5 per cent by next year.

On the other hand, eurozone growth is estimated to fall by between 0.2 and 0.5 per cent by 2017 as a result of the Brexit referendum vote. Eurozone growth is forecasted to be 1.6 per cent for 2016 and 1.8 per cent for 2017.

The International Monetary Fund has also cut its forecasts for growth in the eurozone from 1.7 to 1.6 per cent in 2016 and from 1.7 to 1.4 per cent in 2017.

This article was compiled by Bank of Valletta plc for general information purposes only.