Bank of England keeps interest rates on hold

The Bank of England kept its interest rates unchanged at 4.5%, in a widely expected decision on monetary policy meeting on March 20.

Growing uncertainty over global economy, primarily due to escalating trading war, but also on economic slowdown, threats of fresh rise in consumer prices and renewed geopolitical tensions, prompted British policymakers to stay on hold this time and to sideline expectations about imminent rate cuts in the near future.

Eight MPC policymakers voted for unchanged rates while one opted for 0.25% cut and the committee repeated it will continue to take gradual and careful approach to rate cuts.

Governor Bailey said that the BoE believes that interest rates would gradually fall, but due to high economic uncertainty, decisions will be highly dependent on conditions at the time of policy meetings in coming months, adding to his expectations that inflation pressures would continue to ease.

The Bank of England remains pressured by two strong and opposite forces, inflationary pressure from one side and economic slowdown on the other that will continue to pressure policymakers in the future policy decisions.