Tom Stevenson, investment director for Personal Investing at Fidelity International, predicts that UK interest rates will remain on hold until 2020, having been left at 0.75% today.

There is certainly no economic imperative for the Bank to change its cautious stance. With inflation below its 2% target, the pressure is off. The only way that interest rates would rise this year would be if MPs agreed a deal and there were a material relief pick-up in the economy. Even then, a rising pound would likely bear down on inflation so ‘lower for even longer’ it almost certainly is.

Kevin Doran, chief investment officer at AJ Bell, says savers will continue to get a meagre return:

“Over the decade, a UK bank account will have given savers a 5% return, during which time the cost of living has increased by 34%. These savers will be hoping that the Bank can find reverse gear sometime soon, but today’s announcement will provide them with little hope.”

Tej Parikh, senior economist at the Institute of Directors, fears the Bank is ‘paralysed’ by political uncertainty:

“Facing a Schrödinger’s Brexit in just over a week, the Bank of England continues to have its hands tied on interest rates.

“It’s virtually impossible for the Bank to make clear decisions right now while the various unknowns surrounding the future path for the economy linger. The desire to gradually normalise interest rates from their low levels is already complicated by improved wage growth on one side and weakening economic growth on the other, notwithstanding calculations over the Brexit process. All eyes will now be on any potential further communications from the Bank on how it might support liquidity and confidence in the event of a possible no deal.

Quilter Investors portfolio manager, Hinesh Patel says a disorderly Brexit would be a real conundrum for the Bank:

At the moment the Bank is looking at a Catch-22 type situation. If the UK were to endure a fractious exit from the EU that could lead to a further drop in the Pound, which puts upward pressure on inflation through higher import costs. In the short term at least that will lead to rising prices and the natural response to that would be for the Central Bank to raise rates to avoid fuelling further increases.

At the same time, however, it would come under pressure to inject stimulus into the economy with a loose policy stance to help balance out any immediate term financial impacts of trade disruption.”

Newsflash: The UK’s top union official and the head of its biggest employers group have issued a joint plea to Theresa May to change Brexit policy before the UK suffers major damage.

TUC General Secretary Frances O’Grady and CBI Director-General Carolyn Fairbairn have sent the PM a joint letter calling for a new approach.

They say:

Together we represent millions of workers and tens of thousands of businesses. It is on their behalf that we are writing to you to ask you to change your Brexit approach.

Our country is facing a national emergency. Decisions of recent days have caused the risk of no deal to soar. Firms and communities across the UK are not ready for this outcome. The shock to our economy would be felt by generations to come.

We ask you to take three steps to protect the jobs, rights and livelihoods of ordinary working people.

First, avoiding no deal is paramount. Businesses and employees alike need to see their Government clearly acknowledge the reckless damage no deal would cause and recommit itself to avoiding this outcome.

Second, securing an extension has become essential. 88% of CBI members and a majority in Parliament agree this is better than no deal. But at the same time an extension must genuinely allow a way forwards, and be long enough for a deal to be agreed.

Third, ‘the current deal or no deal’ must not be the only choice. A Plan B must be found - one that protects workers, the economy and an open Irish border, commands a parliamentary majority, and is negotiable with the EU. A new approach is needed to secure this – whether through indicative votes or another mechanism for compromise.

We cannot overstate the gravity of this crisis for firms and working people. We request an urgent meeting with you to discuss our concerns and hear your response.

Brexit clearly cast a dark shadow over this month’s Bank of England monetary policy meeting.

The committee discussed the likely impact of Brexit uncertainties on the economy in the future -- and are worried that a series of ‘cliff-edge’ deadlines could hurt the UK.

The minutes of the meeting say:

If, for example, businesses judged that uncertainty was likely to fade quickly, then that might lead to a larger immediate reduction in capital expenditure, as they waited for a resolution to emerge.

In contrast, a more protracted period of uncertainty might lead to a less abrupt reduction in expenditure if companies judged it too costly to wait for any resolution to become apparent. There was also the possibility of further cliff-edge uncertainties that could have a significant effect on spending as any new deadline approached.

That’s a timely warning, as the UK tries to push Brexit Day back to the end of June.

The Bank of England also reports that four-fifths of UK firms have done all they can to prepare for a no-deal Brexit.

The minutes of this week’s meeting say:

More broadly, the results from the latest special survey of companies’ preparations for EU withdrawal, conducted by the Bank’s Agents, had suggested that around 80% of companies judged themselves ready for a no-deal, no-transition Brexit scenario. This compared with a figure of around 50% in the equivalent January survey.

However, that does not mean that a disorderly Brexit wouldn’t create serious problems.

The Bank adds:

Nevertheless, many of those companies had also reported that there were limits to the degree of readiness that was feasible in the face of the range of possible outcomes in that scenario. These included issues relating to tariffs, border frictions, exchange rate movements and recognition of certifications, which many companies had noted were outside their control. In the Agents’ survey, companies had continued to report significantly weaker expectations of output, employment and investment in the event of a no-deal, notransition Brexit.

Newsflash: The Bank of England has left UK interest rates on hold at 0.75%.

It’s a unanimous vote too, with all nine members of the MPC choosing not to change borrowing costs this month.

The UK central bank has also left its quantitative easing (stimulus) programme unchanged.

More to follow!

The pound has just hit a one-week low against the US dollar, as political worries overshadow this morning’s decent economic data.

Sterling has dropped to $1.313, its lowest level since MPs voted to seek an extension to Brexit last week.

Dean Turner, economist at UBS Wealth Management, says the City fears an accidental no-deal Brexit.

“In a thinly veiled ultimatum to MPs, Theresa May has put the emphasis back on Parliament to support her deal by confirming that she won’t extend Brexit beyond June 30th. While the chances of it passing may be marginally improved, the odds are still stacked against her.

“Should Parliament reject the deal again then the path ahead remains unclear, with Donald Tusk keeping tight-lipped on what the options would be in such a scenario. Our sense is that Parliament will intervene to prevent a no deal exit, but as the clock ticks down, the risk of an accident will only increase.

Sterling has come under pressure as the latest phase of the process unfolds. It therefore still feels prudent to tread cautiously while the news is fast-flowing. We refrain from taking directional views on the currency, while hedging downside risk to sterling seems sensible.”

Our Politics Live blog has all the latest Brexit news:

In another pre-Brexit boost, Britain’s public finances are stronger than expected.

The UK borrowed £0.2bn in February to balance the books, £1.0bn less than in February 2018.

This means that borrowing in the current financial year (since April 2018) is £23.1bn billion, or £18.0bn less than in the same period in 2017-18.

This was the lowest year-to-date since 2001-02, the Office for National Statistics reports.

Economist Rupert Seggins has more details:

Duncan Brewer of consultancy Oliver Wyman suspects that anxious shoppers have been stocking up in case of a disorderly Brexit - boosting sales in February.

Brewer says:

“The increase in February sales is likely to be down to one of two things. Firstly, the uncertainty around Brexit – consumers are stockpiling for fear of price increases further down the line.

Secondly the unseasonably warm February has encouraged consumers to prepare for the Spring and Summer months ahead, purchasing things like barbecues, garden tools and summer clothing.

Newsflash: UK retail sales rose unexpectedly last month, in an indication that Brexit hasn’t stopped consumers hitting the shops.

Retail sales were 0.4% higher in February than January, the Office for National Statistics says. Economists had expected a 0.4% decline.

This suggests that consumer confidence hasn’t been badly eroded by the Brexit crisis. Shops may have benefited from the unseasonably warm weather last month (it certainly made the high street a more pleasant place, until you remembered climate change...)

Here are the key points from February’s retail sale report:

• The monthly growth rate in the quantity bought in February 2019 increased by 0.4%, with a decline of 1.2% in food stores offset by growth in all other main sectors.
• The monthly fall in food stores was the strongest decline since December 2016 at negative 1.5%, reversing the increase of 0.9% in January 2019, with food retailers suggesting that “getting back to normal” following the January sales had contributed to this fall.
• Year-on-year growth in the quantity bought in February 2019 increased by 4.0%, with growth in all main sectors, while the only sub-sector to show a decline within non-food stores was household goods stores at negative 1.3%.

Newsflash: Norway’s central bank has raised interest rates.

Norges Bank has hiked its benchmark rate to 1%, from 0.75%, saying that the Norwegian economy is growing faster than it expected.

The upturn in the Norwegian economy appears to be stronger than anticipated earlier. On the other hand, there are prospects for weaker growth and lower interest rates abroad.

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

With Britain teetering on the brink of full-blown Brexit chaos, the Bank of England will today give its latest assessment of the UK economy.

With a disruptive No-Deal exit potentially just eight (!) days away, the Bank is certain to leave interest rates on hold at 0.75% at this week’s policy meeting. The BoE will also keep its hands away from the stimulus levers, and leave its quantitative easing programme unchanged.

Instead, there’ll be real interest in how the Bank sees the UK economy. Are its Agents more concerned about the state of no-deal planning? Does it see problems building in the money markets? Is the City really ready for the disruption of a disorderly Brexit?

We find out at noon, when the Bank publishes the decision and the minutes of this week’s Monetary Policy Committee meeting.

We might also get a hint about when the Bank will raise interest rates, now that wages (+3.4%) are rising rather faster than inflation (1.9%).

Before that, the Office for National Statistics will release its retail sales and public finance figures for February.

Economists predict that retail sales shrank by 0.4% in February, as consumers cut back after the January sales. A weak reading would fuel concerns that Brexit is hurting the economy.

The public finances are expected to show that Britain borrowed around £600m to balance the books in February (January was much better, with bumper tax receipts producing a surplus of almost £15bn).

City traders will also be watching Brussels, as the prime minister tries to persuade EU leaders to give her more time to get her deal through parliament. The mood in Westminster is even more febrile, after last night Theresa May went on TV to castigate MPs for not backing the Withdrawal Agreement.

On the corporate front, retailer Next, fashion chain Ted Baker and computer game seller Game Digital are reporting results.

The agenda

• 8.30am GMT: Swiss National Bank’s interest rate decision
• 9.30am GMT: UK public finances for February
• 9.30am GMT: UK retail sales for February
• 12pm GMT: Bank of England interest rate decision