United Kingdom: Central Bank holds rates in March
Latest decision: In mid-March, the Central Bank voted to keep the bank rate at 3.75%, following cuts of 150 basis points from August 2024 to December 2025.
Bank takes cautious approach in light of high global energy prices: The Bank decided to take a wait-and-see approach to evaluate the impact of past monetary easing, in a context of inflation above the 2.0% target and upside risks to inflation stemming from the recent surge in energy prices linked to the Iran war.
Guidance turns open-ended: The Central Bank said it “stands ready to act as necessary” to meet the target, replacing the previous meeting’s guidance that the bank rate was “likely to be reduced further”. While most panelists currently see monetary easing later this year, interest rate forecasts will be revised up if energy prices stay elevated.