Bank of England holds rates at 4.5%, dampens cut hopes

The Bank of England decided to maintain interest rates at 4.5% amidst significant economic uncertainty, particularly due to global trade tensions exacerbated by U.S. tariff policies under President Trump. In a vote of 8-1, policymakers expressed caution, with Governor Andrew Bailey indicating that while rates may gradually decline, there is no set path for future reductions. Despite forecasts for inflation to rise to around 3.75% this year, the bank emphasized the need to closely monitor economic developments before making further decisions. Economists suggest that another rate cut could be on the horizon in May, depending on forthcoming economic data. The decision led to a slight rise in the value of the British pound and impacted bond markets, reflecting trader speculation about future monetary policy. Overall, the Bank of England remains committed to addressing inflation while navigating a challenging growth environment.