The Bank of England has maintained interest rates at 4.5 per cent amid growing concerns over a global trade war.
Swati Dhingra, an external member of the Monetary Policy Committee (MPC), was the only one who voted for a 25 basis point reduction, as reported by .
This decision marked a divergence from Catherine Mann, with whom Dhingra had previously voted for a significant 50 basis point cut in February.
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The Bank's economists remain pessimistic about 海角视频 growth due to President Donald Trump's extensive tariffs, including those on steel and aluminium.
The Bank also reiterated its February forecast that inflation could reach a peak of 3.75 per cent this year.
Chancellor Rachel Reeves acknowledged the government's responsibility to mitigate inflation, stating: "I'm fighting every day to put more money in the pockets of working people to deliver our Plan for Change," Susannah Streeter, Hargreaves Lansdown's head of money and markets, warned that price increases are likely to continue.
She said: "Pay growth remains strong, with vacancies rising and so there is concern that inflation will stay stubborn – it's forecast to rise to 3.75% in the third quarter of this year before falling back – just as the economy has gone into reverse."
Streeter added that stagflation has emerged and does not seem to be receding soon, which will complicate decision making.
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However, she suggested that concerns about growth may soon start to outweigh worries about persistent prices.
Inflation creeping up
Inflation reached three per cent in January, with the upcoming figures for February's price increases due to be announced next Wednesday, just before Chancellor Rachel Reeves delivers her Spring Statement.
The Office for National Statistics (ONS) released figures this morning that serve as a stark caution to those tracking inflation.
The wage growth recorded at 5.9 per cent from November 2024 to January 2025 is expected to put additional pressure on inflation rates.
Ruth Gregory, an economist at Capital Economics, remarked earlier today that these figures have placed the Bank of England in a "tricky position."
The Bank's regional Agents have reported that economic activity remains muted, citing poor consumer and business confidence as the primary obstacle to growth.
Despite many City analysts predicting that the Bank of England would maintain its interest rates, there is a consensus among economists and business leaders that a rate cut in May could be more probable.
US Fed sets trend
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Setting a precedent, the US Federal Reserve decided to keep its interest rates steady last night.
The Fed's decision to hold rates at around 4.5 per cent was influenced in part by President Donald Trump's aggressive tariff policies.
Additionally, the Fed has downgraded the US economic forecast, reducing its growth prediction from 2.1 per cent to 1.7 per cent and suggesting that inflation might near 3 per cent.
Fed Chair Jerome Powell expressed concerns that "further progress" in the world's largest economy might be hindered by the unpredictability of Trump's policy changes.