Bank of England Keeps Interest Rates Steady at 4.5%, Citing Economic Uncertainty

The Monetary Policy Committee votes 8-1 to hold rates, warning against assumptions of imminent cuts as inflation and global trade tensions weigh on the outlook.

• The Bank of England has decided to maintain interest rates at 4.5%, with an 8-1 vote by the Monetary Policy Committee.
• Governor Andrew Bailey emphasized ongoing economic uncertainty, including global trade tensions and domestic fiscal challenges, as key factors in the decision.
• Inflation is now forecast to peak slightly higher at 3.75% in Q3 2025, while Q1 economic growth estimates were revised up to 0.25%.
• The Bank has been less aggressive in cutting borrowing costs compared to the U.S. Federal Reserve and European Central Bank, reflecting its cautious approach.
• Finance Minister Rachel Reeves is expected to announce public spending cuts in her upcoming Spring Statement, potentially impacting the economic outlook further.

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