The Bank of England maintains its key rate by warning against the threat of trade tensions

The central bank reiterated that further rate hikes would be needed to bring inflation back to its target of 2% versus 2.5% in July and maintain it, but also reiterated that these measures would be "limited and gradual".

There are signs that the UK economy has gained momentum in recent months, potentially fueling inflationary pressures. The Office of National Statistics announced Monday that economic growth resumed between July and July, while wages during this period were 2.9% higher than those of the previous year.

The BOE said the figures were in line with its August forecast for growth and inflation in the UK. But this sounded a warning about the global economic outlook.

"The recent announcements of protectionist measures by the United States and China, if implemented, could have a slightly more negative impact on global growth than expected," he said in a statement.

She also cited signs of slowing growth in emerging market economies and pointed out that trade and financial ties with Argentina and Turkey were "limited".

One of the main uncertainties facing the US economy is Britain's imminent withdrawal from the European Union. The UK is expected to leave the EU in March 2019, but the main aspects of the country's withdrawal and its future relations with the bloc have not yet been agreed.

Negotiators were hoping to reach an agreement by October, but the authorities have now set their targets in November.

The rating agency Moody's Investors Service warned Thursday that leaving the EU without a new trade deal would hurt the UK economy.

"We still believe that the UK and the EU will eventually reach an agreement to preserve many of their current trade agreements, especially with regard to trade in goods," said Colin Ellis, director of the United States. credit for Europe, the Middle East and Moody's. Africa. "However, we think that the prospect of the UK leaving the EU without any agreement has increased significantly."

The BOE, for its part, said the financial markets had "greater uncertainty" about the withdrawal process, while its regional agents reported that some companies had reduced their investment plans in response to the possibility of increased trade frictions ". l & # 39; EU.

Policy makers at the BOE said their political parameters were based on the assumption that there would be a "smooth adjustment" to the new relations between the UK and the EU.

Write to Paul Hannon at [email protected]