On the 15 September, the Bank of England’s announcement at 12:00pm (GMT+1) didn’t ruffle any feathers. At least for now.

BoE’s Announcement: 

The Bank of England feels good about the economy. (Hurrah!) In this last meeting of the month, it voted to leave interest rates at 0.25% and its Quantitative Easing (QE) programme the same. It will continue buying up to £10bn in corporate bonds and £435bn in government bonds. Two of its policymakers argued that QE is unnecessary, but there is no going back now. The next meeting for the Monetary Policy Committee (MPC) of the BoE is scheduled on 15 December.

MPC: The Monetary Policy Committee meets twelve times a year to decide the UK’s interest rates. There are currently nine members with Mark Carney as the Governor.

Warnings:

Despite the recent good news: the inflation report, retail sales doing well, consumer confidence, and July’s impressive figures, the months ahead might not be so rosy. Many economists were justified about the BoE’s decision to keep interest rates the same, but they all also agreed that foretelling what is going to happen in the coming months isn’t an easy task. Many believe that the BoE will cut interest rates, even if the Bank seems less pessimistic about the country’s growth—for the time being. In general, many economic advisers are warning that the long term effects of QE will cause problems to people’s savings and pensions.

November might be a cruel month: If the economy doesn’t improve, then on 3 November, when the BoE will meet again, it might decide to cut interest rates close to zero. (Boo!) Chancellor Philip Hammond’s decisions on 23 November, when he will be laying out the new government’s tax and spending plans, will also affect the possibility of lower interest rates. Suren Thiru, head of economics at the British Chambers of Commerce (BCC), thinks that cutting interest rates before Christmas is not a good thing and that the Chancellor should concentrate on spending: “it is vital that the government uses the upcoming Autumn Statement to deliver a fiscal environment that supports confidence and incentivises businesses to invest.”

A fiscal policy is when the government spends money to improve interest rates, decrease taxes for some groups, lower unemployment rate, control inflation so that it creates a stable economy. This should complement the monetary policy of the BoE.

Savings accounts: November will be very cruel for savers and pension funds holders, since very low interest rates will add no significant increase to their savings.

Charles Cowling, director at pensions consultants JLT Employee Benefits, said that: 

“If markets are to be believed we could see interest rates stay at current record lows for the next 5 years, which is not good news for pension schemes. This means there is no respite in sight from the record pension deficits caused by the Bank’s interest rate policy. As a result, there are going to be inexorable demands on employers for significant increases to cash funding of pension schemes. This will not be good news for share prices or dividends.”

In general, the situation appears to be positive and there are no reasons for drastic measures. But with Brexit on the horizon, the economy struggling and investors remaining cautious, it might be urgent to start considering the timing of Article 50. The sooner the better, since uncertainty will definitely stop businesses from investing and spending money.