Bank of England holds interest rates amidst economic uncertainty

After a vote taken by the members of the Monetary Policy Committee, the Bank of England decided to keep its key rate at 4.5%. With the recent announcement of new US tariffs, experts on the panel were particularly concerned about the escalating uncertainty surrounding global trade.

Commenting on the decision, Paul Dales from Capital Economics said that despite keeping interest rates on hold, the Committee has taken a more hawkish stance than in the previous meetings. Even though the policy has not changed, he later noted. What complicates the matter is the slowing UK economy, which contracted by 0.1% in January while inflation rose to 3%.

In planning its next steps, the central bank stressed the importance of being cautious about potential rate cuts. The regulator is ready to adjust its measures depending on the situation, given the impact of external factors on the domestic market. Meanwhile, Hussain Mehdi from HSBC Asset Management noted that inflation concerns currently outweigh the risks of a growth slowdown.