England Bank in London on February 12, 2024.
Henry Nichols AFP | Gety pictures
The Bank of England is widely expected to carry interest rates when it meets on Thursday, as the UK faces economic opposite winds at home and abroad.
The central bank is likely to maintain the standard interest rate of 4.5 % in its meeting in March, given the inability to predict President Donald Trump's commercial definitions and emerging global trade war, and how these factors can affect inflation in the United Kingdom
England Bank also does The British economy also shows signs of procrastination, while showing the monthly growth data resulting from poverty. A meeting on Thursday a few days before the start of the US government's tax changes, which have proven to be unimportant with companies, which says that the growing tax burden may be scattered on growth, investment and jobs.
For its part, the Bank of England has already warned in its last meeting in February that it would carefully step, as it reduced the expectations of UK growth for 2025 and Expect a temporary rise At the inflation rate to 3.7 % – higher than the bank's 2 % goal – which policymakers on Bank said that the reason for the high energy prices.
As for Trump's definitions, England governor Andrew Billy warned earlier in March that possible commercial duties were another threat to the country's economy and growth, Tell British legislators The “risks to the British economy, and indeed the global economy are great” and that British citizens will have less money “in their pockets” as a result of the definitions.
The opposition in the committee
In February, a majority of seven members of the nine powerful monetary policy committee voted in favor of a reduction, as two MPC members, including the well -known Catherine Mann “, voted in favor of a greater trim.
Economists say that the division of voting on Thursday will be seen closely.
“There are clear signs of the dispute in the Bank of England at the pace of the required price discounts this year. But with wage growth and sticky inflation remaining, we expect the bank to retain the rates this Thursday, before reducing the next rate in May,” said James Smith, the economist in the markets on Monday.
Andrew Billy, the ruler of the Bank of England, during a press conference for the financial report at the Central Bank headquarters in London on November 29, 2024.
Bloomberg Bloomberg Gety pictures
“The drama is often synonymous with England Bank. But the February meeting was not less than a bomb.
“Despite all the excitement, it seems that the answer is not. Most of the officials who have spoken since then have hit a more cautious tone,” he pointed out, with three other price discounts to take place. However, he acknowledged that inflationary pressures put the central bank in a “uncomfortable position”.
Budget changes?
The Bank of England considered a few days before the “Spring Statement” of the UK Ministry of Treasury on March 26, when British Chancellor Rachel Reeves presented an update on its plans for the British economy.
The Minister of Finance is under pressure to reduce public spending, or to raise taxes further or to dissuade the financial rules imposed by the government on the self -borrowing costs, with a return on UK debt in recent months. The Treasury has stained the idea of cutting spending on social welfare payments, but the idea is still controversial among legislators in the work government in the middle of the left.
The “Spring statement”, Reeves, will be announced, along with economic expectations from the budget responsibility office, the independent economic and financial forecast in the United Kingdom, which gives its evaluation the potential impact of Tax and spending plans for the government Which was announced last fall.
This budget included an increase of 40 billion pounds (51.9 billion dollars) of taxes – with a decrease in the burden mainly on companies – to connect a black hole in public financial affairs and allow investment in public services.
Rachel Reeves, UK's Finance Minister, spoke to “Squawk Box” from CNBC outside the World Economic Forum in Davos, Switzerland, on January 22, 2025.
Jerry Miller CNBC
OBR is widely expected to reduce its economic expectations in the United Kingdom, making more pressure on Reeves to amend its political plans.
“It was not supposed to be like this. UK Chancellor Rachel Reeves planned to provide the government’s semi-annual expectations on March 26 without making any changes to policy. However, the rise in interest rates in the market, the rise in borrowing in the fiscal year 2024-25, and a possible reduction in the office to assume the growth of productivity in the budget, and analyzes of great persuasion.
“Without discounts in spending or high taxes, OBR will expect that the government is missing its financial ruling represented in its entire daily spending with tax revenues by 2029-30. To avoid six months of speculation about how Reeves create a shortfall in the next full budget in the fall, the consultant must act now.”
