Central Banks on Hold

The US and UK have kept rates on hold this week.

Latest MPC meeting and Bank of England interest rate decision

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UK and US Central Banks left interest rates on hold

The US Fed and UK's Bank of England had their policy meetings this week. Both Central Banks left interest rates unchanged at 4.5%, but were not shy about accepting that the economic outlook going forward is uncertain, given Trump’s tariff policies.

They raised their forecast for inflation while widening the range for GDP growth, leading to lower average growth for 2025.

The Fed reduced its QT (Quantitative Tightening) program by reducing its bond run off from $25 billion to $5 billion. Analysts see this as a precursor to the Fed lowering interest rates later this year.

Central Banks are caught between a growth rock and an inflation hard place.  With erratic tariff policy adding to the risk of “zombie inflation,” which though down is not dead, it makes it a challenge for Central Banks to cut rates to support growth.
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Our latest Growth, Inflation, Rates summary charts for the UK and US are below

Read our explainer: What are macro factors?