The decision, which was widely expected, saw the central bank’s Monetary Policy Committee (MPC) vote 8-1 in favour of keeping rates unchanged. One member of the committee supported a 25-basis-point cut.

“Since the MPC’s previous meeting, global trade policy uncertainty has intensified, and the United States has made a range of tariff announcements, to which some governments have responded,” the BOE said in its statement. “Other geopolitical uncertainties have also increased and indicators of financial market volatility have risen globally.”

The backdrop to the decision includes ongoing volatility in global trade, particularly due to shifting policies in the United States. President Donald Trump’s tariff measures have contributed to market uncertainty, with potential implications for UK inflation and economic growth.

The UK economy has shown signs of weakness, contracting by 0.1% in January. The central bank had already downgraded its 2025 growth forecast in February, halving it to 0.75%.

Inflation remains a key concern, with the BOE previously predicting a temporary rise to 3.7% in the third quarter of this year due to higher energy costs. In January, inflation unexpectedly climbed to 3%.

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