FX.co ★ BoE Keeps Rates Steady

The Bank of England's Monetary Policy Committee (MPC) decided by a majority vote of 8-1 to maintain the Bank Rate at 4.5% during its March 2025 session, aligning with market expectations. One member expressed a dissenting opinion, advocating for a reduction of 25 basis points to bring the rate down to 4.25%. The committee highlighted significant advancements in reducing inflation over the past two years, attributed to diminishing external shocks and the central bank's monetary policy interventions. Nonetheless, they acknowledged an uptick in global trade and geopolitical uncertainties. The UK's GDP growth is slightly outperforming expectations, although business surveys point to subdued growth and employment levels. Consumer Price Index (CPI) inflation rose to 3.0% in January, and despite a decrease in global energy prices, inflation is projected to increase to 3.75% by the third quarter of 2025. The MPC emphasized that it would continue to exercise caution in its monetary policy stance, modifying its approach as necessary in response to evolving demand, supply, and inflationary pressures.