A recent Reuters survey of 61 economists predicted the BoE would hold its benchmark interest rate steady at 4.5%, opting for a cautious approach amidst the complexities of U.S. President Donald Trump’s trade policies and the mixed performance of Britain’s economy.
Meanwhile, they anticipate potential rate cuts in May, August, and November.
Since the BoE’s previous rate cut on February 6, little has changed in the UK’s economic landscape. However, Trump’s erratic tariff announcements have unsettled global financial markets and stirred concerns about worldwide inflation.
Stock markets, particularly in the United States, have also been affected by such uncertainties, with more than $5 trillion in market value having been wiped out due to fears that Trump’s strategies might induce a U.S. recession.
In contrast, Germany’s leading political parties unveiled a 500-billion-euro investment plan targeting infrastructure and defense, which provided a notable boost to the value of numerous manufacturing companies.
The juxtaposition of these global developments leaves unclear implications for the United Kingdom, with the BoE likely to reserve judgment until receiving more data, according to HSBC’s senior UK economist, Elizabeth Martins.
According to the Reuters poll, the Monetary Policy Committee (MPC) is expected to vote 7-2 in favor of maintaining current rates.
In the previous meeting in February, seven members supported a quarter-point rate cut, while two advocated for a half-point reduction. Investors will be attentive to shifts in the committee’s stance, especially as some members express heightened concern about enduring inflation.
