Policy pause: Bank of England holds rates at 4% ahead of UK budget; Bailey signals caution as inflation, growth pressures persist

The Bank of England maintained its benchmark interest rate at 4%, prioritizing caution ahead of the UK government’s budget, which is anticipated to include tax increases. Governor Andrew Bailey indicated rates are on a “gradual path downwards” but emphasized the need for clear signs of inflation returning to the 2% target before any further reductions are considered.