Interest Rates on Hold: Bank of England's Balancing Act Amid Economic Uncertainty

The Bank of England has maintained its interest rate at 4.50%, reflecting caution amid economic uncertainty and potential US tariff impacts. Most committee members agreed with the decision, given current inflation above target. Some economists predict possible rate cuts in May to support growth.

The Bank of England maintained its primary interest rate at 4.50% on Thursday, reflecting a cautious stance amid a sluggish economy and potential impacts from the US tariff policies under President Trump.

The move was anticipated by many, especially following the US Federal Reserve's decision to keep rates unchanged. Eight of the nine Monetary Policy Committee members voted for the status quo, with one advocating for a reduction.

Despite inflation running at 3%, above the bank's 2% target, the expectation is for a rise to possibly 4% due to business cost increases. Governor Andrew Bailey indicated that the rates are on a 'gradually declining path,' hinting at a possible reduction in May.

(With inputs from agencies.)