The Bank of England (BoE) has decided to maintain its base interest rate at 4.5%, following its latest Monetary Policy Committee (MPC) meeting
The Bank of England has warned economic and global trade uncertainty has ‘intensified’ as it held UK interest rates at 4.5%.
This decision, supported by eight out of nine committee members, reflects the Bank’s cautious approach amidst ongoing economic challenges.
The move comes as inflation remains above the Bank’s 2% target, with the UK Consumer Prices Index (CPI) inflation recorded at 3% in January 2025. Rising energy costs, water bills, and transportation fares have contributed to the persistent inflationary pressures.
Despite these challenges, the UK economy has shown mixed signals, with a slight GDP growth of 0.1% in the final quarter of 2024, followed by a contraction of 0.1% in January 2025.
The BoE’s decision to hold rates steady aims to balance the need to control inflation while supporting economic stability. Governor Andrew Bailey reportedly emphasised the importance of monitoring both global and domestic economic developments closely (that’s useful then – what a good idea).
The MPC’s cautious stance reflects concerns over global trade uncertainties and the potential impact of geopolitical tensions.
While the decision provides some relief to borrowers, it leaves savers and businesses navigating a landscape of economic uncertainty.
Analysts predict that the Bank of England may consider rate cuts later in the year, depending on inflation trends and economic performance.
For now, however, the focus remains on maintaining stability in a forever fast challenging environment.