Bank of England Keeps Interest Rates Steady at 4.5%

Members of the Bank of England (BoE) decided not to proceed with another immediate reduction in interest rates, as the central bank maintained its policy amidst a turbulent global landscape. The Monetary Policy Committee of the Bank of England voted 8 to 1 in favor of keeping the base rate steady at 4.5%. Most policymakers favored a more cautious approach than economists had anticipated. The BoE is the latest central bank to adopt a more conservative tone, as monetary policy remains uncertain due to U.S. President Donald Trump’s ongoing tariff crusade. The division among members saw support for an immediate cut at its lowest level in six months, prompting investors to reduce bets on a May move to a 65% probability, down from 70% before the decision. Two BoE members who previously supported lowering borrowing costs in the last three meetings – Deputy Governor Dave Ramsden and Alan Taylor – voted against changing the policy, as did Catherine Mann, who shocked markets by advocating for a sharp half-unit cut in February. Sue Dartmouth voted for a quarter-unit reduction, scaling back her February call for a half-unit cut. The pound pared earlier losses and traded 0.2% lower at 1.2976 dollars. French bonds retained their gains with yields up to six basis points lower across the curve, with traders still pricing in 53 basis points for additional interest rate cuts by year-end.