' Fog of Brexit increasing recession chance': Bank of England

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He added: "If and when we do leave, an orderly Brexit could see the Bank refocus on wage growth and raise rates later this year, though markets now price this as a 50/50 chance".

The European Central Bank has sounded more anxious that the euro zone's recovery has run out of steam.

The ruling Bharatiya Janata Party (BJP) is already in an election mode. "The need is to strengthen private investment activity and buttress private consumption".

But it still wasn't enough, he said.

India's last rate cut, to 6.00%, was in August 2017.

The central bank's nine-member Monetary Policy Committee voted unanimously to leave rates at 0.75%, as had been widely expected.

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The RBI also eased bank lending restrictions for non-banking finance companies and raised the limit on "collateral free" farm loans in an attempt to boost lending to almost 120 million rural households.

"The Bank's forecasts, when put together with recent business surveys, illustrate the harmful impact on the economy the longer that this goes on".

The BJP welcomed the decisions as they will help to dispel any perceptions that the government has not addressed credit issues facing businesses.

Last week, the ruling BJP in its "interim" budget doled out cash to farmers and tax cuts to middle-class families.

Explaining the rationale for the rate cut, Das said it was "vital to act decisively and in a timely manner to address the objective of growth once price stability as defined (in RBI's inflation-targeting mandate) is achieved". Any outcome other than no change from the meeting would have been a significant surprise. Whilst rates remain unchanged and growth is lagging, customers are encouraged to lock away money in competitive savings products.

The weaker growth outlook came even as the Bank acknowledged that investors have scaled back their expectations on how much interest rates are likely to rise, a key factor underpinning its own projections.

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The UK economy is expected to report on the manufacturing, the fourth quarter GDP and the January inflation during the upcoming week with all figures painting the same picture of the general economic slowdown.

'A period of softer growth domestically and in the rest of the world was likely to be prove only temporary, ' the Bank said.

The BJP lost three key state elections to the opposition Congress late past year and national polls have indicated that Modi faces a tough re-election battle against a resurgent opposition as Congress and regional parties form alliances.

The EC slashed its forecast for Italy to just 0.2 per cent for the whole year, compared with a previous forecast of 1.2 per cent, while it also trimmed Germany's forecast to 1.1 per cent from 1.8 per cent. That was the biggest forecast cut since immediately after the 2016 Brexit referendum.

"Our loan requirement has been rising as fertiliser and diesel prices are going up".

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