"The Bank of England's monetary policy committee (MPC) has voted to keep interest rates on hold at 3.75 per cent. No shock there, given the uncertainties generated by the Iran war, but until the launch of Operation Epic Fury, pretty much everyone thought the Bank would take another of its baby steps and cut interest rates again by 0.25 percentage points."
"The change highlights how policymakers, investors, businesses and households are holding their breath at the moment and such uncertainty could weaken the economy even in the short term. The decision was unanimous at 9-0 to hold rates, indicating a firm decision to stay on the fence."
"Before the Iran war, the outlook for inflation returning to the MPC's 2 per cent target was relatively benign. You could say that the worst of Trump's tariff chaos was over, that economic growth was fragile but gradual and that wage settlements had been slowly declining."
The Bank of England's monetary policy committee voted unanimously 9-0 to maintain interest rates at 3.75 percent rather than cut them by 0.25 percentage points as previously anticipated. This decision reflects heightened uncertainty stemming from the Iran war, which has prompted policymakers, investors, businesses, and households to adopt a cautious stance. Before the conflict, conditions appeared favorable for inflation to return to the 2 percent target, with tariff impacts stabilizing, gradual economic growth continuing, and wage settlements declining. The current geopolitical tensions have shifted the outlook, making policymakers hesitant to adjust rates until the situation becomes clearer.
Read at www.independent.co.uk
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