From Yahoo Finance: 2025-03-20 02:54:00

The Bank of England kept the main interest rate at 4.50% amid economic uncertainty due to Trump administration tariff policies. Inflation is at 3%, above the 2% target, expected to rise to 4%. Another rate cut in May is likely as the U.K. economy struggles with slow growth.

Bank Gov. Andrew Bailey stated that the gradual decline in interest rates will continue. Policymakers will closely monitor global and domestic economic developments to ensure low and stable inflation. The U.S. Federal Reserve also kept rates unchanged, expressing concerns about the economic outlook.

The British economy grew by only 0.1% in the fourth quarter, disappointing the new Labour government’s growth plans. Treasury chief Rachel Reeves faces criticism for increasing taxes on businesses. Reeves is expected to address public finances in a statement to lawmakers on March 26.

Economists anticipate a further quarter-point rate reduction in May but suggest uncertainty remains regarding trade policies and fiscal announcements. The Bank of England’s decision did little to clarify the economic outlook, emphasizing the challenges ahead for the U.K. economy.

Read more: With outlook uncertain, the Bank of England joins the US Fed in putting interest rates on hold