By WSJ City 

The Bank of England left its benchmark interest rate unchanged as it cautioned of rising trade tensions darkening the outlook for the global economy. The BOE nevertheless said it expects to slowly nudge up interest rates in the next two to three years if the UK's planned exit from the European Union goes smoothly.

KEY FACTS

--- The BOE's rate setters voted unanimously to leave the UK central bank's main policy rate at 0.75%.

--- That makes the BOE stand out among major central banks.

--- Both the ECB and Fed have signalled cuts ahead.

--- The panel said the British economy will likely slow in Q2 and inflation will soon drop below its 2% target.

---They said the British economy's prospects are closely linked to Brexit.

Why This Matters

Several candidates vying to replace Theresa May as UK PM have said they would be prepared to take the UK out of the bloc without a deal if the EU won't reopen the agreement inked with May. They argue the current withdrawal package would leave the UK too closely bound to the EU.

A no-deal Brexit would likely cause severe disruption to the British economy, economists say, scrambling the BOE's interest-rate plans. The central bank said Thursday that it is ready to cut rates or raise them in such a scenario, depending on how the economy responds. Most economists expect officials' first move would be to cut borrowing costs to support growth.

A fuller story is available on WSJ.com

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(END) Dow Jones Newswires

June 20, 2019 10:15 ET (14:15 GMT)

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