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The has kept the central interest rate at 4.5%, with policymakers warning of increased uncertainty over global trade due to new US tariffs. Eight of the nine members of the Bank's Monetary Policy Committee (MPC) voted to hold rates steady as they assess the impact of global economic and political developments.

Andrew Bailey, Governor of the Bank of England, said: "There's a lot of economic uncertainty at the moment. We still think that interest rates are on a gradually declining path, but we've held them at 4.5% today. We'll be looking very closely at how the global and domestic economies are evolving at each of our six-weekly rate-setting meetings. Whatever happens, it's our job to make sure that inflation stays low and stable."

The base rate significantly impacts the cost of and loans and influences the interest rates banks offer on savings accounts.

The base rate peaked at 5.25% in late 2023, but policymakers reduced it to 4.5% throughout the following months as inflation eased. The Bank of England typically raises when inflation is high to curb spending and slow price increases.

The markets widely expected the decision to hold rates amid growing global uncertainty. Consumer Prices Index (CPI) inflation rose to 3% in January, driven by energy prices, water bills, and bus fares. At the same time, the UK economy has been teetering on the edge of decline - with gross domestic product (GDP) rising by 0.1% over the final three months of the year but contracting by 0.1% in January.

The Organisation for Economic Co-operation and Development (OECD) also . The OECD warned that "further fragmentation of the global economy" was a significant concern amid trade tensions sparked by US President Donald Trump. The OECD warned that this would likely increase inflation worldwide and further impact living standards.

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