The Bank of England remains in "suspended animation" after the meeting of Halloween

LONDON (Reuters) – The British central bank is expected to maintain interest rates on Thursday after a general policy meeting on Halloween that economists say will keep long-term rising borrowing costs in a hurry. suspended animation ".

Rather than zombie companies or supernatural forces, it's the best-known spinach of an economically detrimental Brexit that will keep the Bank of England in abeyance after the latest hike in its rates of interest three months ago.

"Until an agreement is reached – or not – we suspect the BoE to be in abeyance," said Robert Wood, economist at Bank of America Merrill Lynch, in a note. addressed to its customers.

A year ago, the BoE raised interest rates for the first time since the global financial crisis. This increase was followed by a further rise in borrowing costs, which reached 0.75% in August.

Economists polled by Reuters expect the nine members of the BoE's monetary policy committee to vote unanimously to keep rates unchanged this month and see no new rate hikes before the month on average from May.

Britain must leave the EU on March 29 next year, but Prime Minister Theresa May has not yet signed a transitional agreement guaranteeing that goods and people will be able to continue to move freely between Britain and the EU the next day.

The fall of the pound against the dollar and the euro after the June 2016 Brexit vote pushed inflation to a 3-year high of 3.1% last year.

The effects of this phenomenon fade and inflation fell to 2.4% in September. Some BoE policymakers fear, however, that the acceleration of wage growth will delay the return of inflation to its 2% target.

By eliminating volatile bonuses, annual salary growth for the quarter ending in August reached 3.1%, its largest increase since January 2009, prompting BoE chief economist Andy Haldane to speak of a "new dawn" for wage growth.

Other officials, such as Deputy Governor Jon Cunliffe, are more skeptical and recent consumer data reveal a slowing of spending after a summer madness caused by unusually hot weather.

The BoE will update its growth and inflation forecasts on Thursday. Some economists predict that inflation forecasts will be in a fraction of more than 2% from August, a stronger currency and higher global interest rates offsetting the inflationary potential of higher wages.

Growth for this year was estimated at 1.4% in August – due to heavy snowfall hitting the economy early in the year, and the BoE is expected to stick to the forecast for the year. 39, a recovery in 2019, assuming that the Brexit is running smoothly.

BoE Governor Mark Carney said in August that market expectations of a 25 basis point base-year increase were a good rule for households, and economists see no change this expanded approach on Thursday.

"As we approach the final phase of the negotiations (Brexit transition), we do not expect the BoE to change its forecasts," said Bank of America's Wood.