Responding to the Bank of England’s decision to hold interest rates, Tej Parikh, Chief Economist at the Institute of Directors, said:

“There is mounting evidence that the UK economy may have experienced a bit of a post-election bounce, so on balance the Bank made the right call to hold interest rates for now.

“Confidence is up, orders are rising, and firms are thinking about making new hires and investments, but with uncertainty still on the horizon, it’s unclear just how much economic activity will change over the course of 2020.

“The MPC will want a clearer run of data to see how underlying economic conditions are reacting to the new political environment, which may place the Bank in a better position to make a decision on rates at its next meeting.

“Another unknown for rate-setters’ calculations is the extent of the fiscal boost at the forthcoming Budget, which backs up their decision to sit on rate changes for now, at least until their next post-Budget meeting in March.

“On the bigger picture, withholding a rate cut today does also afford the Bank greater wiggle-room in the future if uncertainty eats into business activity and the fiscal boost fails to sufficiently stimulate the economy.”