The Bank of England has held interest rates at their record low amid signs of an internal split emerging about how to tackle rising inflation.
It could have been worse.
Brexit poses a risk to the global financial system and could spark more than 230,000 job losses in the financial sector, senior City figures have warned MPs as they called for clarity on the UK’s future relationship with the EU.
Uncertainty over the outlook for the UK economy after the Brexit vote in June has sent the pound plummeting to levels not seen since the 1980s.
The Bank of England has left interest rates at their record low of 0.25% but repeated a warning that higher inflation and slower wage growth risk squeezing household budgets and spending next year.
The European Central Bank has vowed to continue with its programme of electronic money printing to shore up the eurozone recovery but surprised financial markets by reducing the amount of stimulus it expects to provide each month.
Britain’s rising inflation rate has been brought to a halt after cheaper clothes and a smaller increase in university tuition fees meant the annual increase in the cost of living fell to 0.9%.