Bank of England Expected to Maintain Interest Rates Amid Economic Challenges

According to BlockBeats, the Bank of England is anticipated to keep interest rates steady this week, aligning with the U.S. Federal Reserve's recent actions. However, it may implement more significant rate cuts later this year compared to the Federal Reserve. Similar to the U.S. central bank, the Bank of England expects inflation to continue easing in the coming months but aims to ensure that inflation reduction is on track and to avoid lowering borrowing costs too rapidly. The British economy has been notably weaker than that of the United States. After stagnating in the third quarter, the UK economy grew by only 0.1% in the fourth quarter, narrowly avoiding a recession. Concerns over the impact of the Russia-Ukraine conflict and tariffs imposed by U.S. President Donald Trump on global economic growth have affected the UK, which also faces its own economic challenges. The government, led by Prime Minister Keir Starmer, has been striving to restore consumer and business confidence in the economic outlook. The Bank of England has stated it is adopting a "gradual and cautious approach" to lowering interest rates. However, with the economy stagnating, the direction of interest rates is clear. Economists at Nomura Securities, led by George Buckley, predict that the central bank will maintain rates in March and cut them again in May. They foresee rate cuts at every meeting from now until February 2026, with a terminal rate of 3.5%.