“Holding interest rates will come as a bitter blow to those home buyers grappling with the striking hike in mortgage rates since the Iran war started and businesses toiling against elevated cost pressures.
“The vote split suggests that this was a hawkish rate hold, highlighting how recent divisions within the committee have faded for now amid a wave of new inflation risks and uncertainty caused by this Middle East conflict.
“While policymakers will want to avoid a repeat of 2022 when it raised rates too late to stop inflation surging, following Russia’s invasion of Ukraine, they should be careful not to overcorrect for past mistakes as this time policy is more restrictive and inflation is lower, leaving rate-setters favourably positioned to cope with this crisis.
“While another interest rate cut remains possible if the Iran war ends quickly, with skyrocketing oil and gas prices locking in an imminent inflation spike, the chances of further policy loosening this year is rapidly receding.”
ENDS
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* includes parent companies. Source: ICAEW member data March 2025, Interbrand, Best Global Brands 2024.
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