LONDON (Reuters) –

Bank of England Governor Andrew Bailey stated earlier this month that he is maintaining a “gradual and careful” approach to interest rate cuts due to uncertainty from U.S. tariffs affecting the economic outlook.

In May, the BoE’s Monetary Policy Committee (MPC) voted 5-4 to cut interest rates by a quarter of a percentage point to 4.25%. External MPC members Swati Dhingra and Alan Taylor supported a further cut to 4%, while Catherine Mann and Huw Pill preferred to hold rates steady.

Financial markets estimate a nearly 90% chance that the BoE will maintain rates at 4.25% on June 19, with expectations of about 50 basis points in rate cuts by the end of 2025, mirroring projections for the U.S. Federal Reserve.

Summary of MPC Members’ Comments:

ANDREW BAILEY, GOVERNOR

• June 3: “The path for interest rates remains downwards, but uncertainty clouds how far and how quickly. Gradual and careful remains my guiding line.”
• May 29: “The less volatile aspect of inflation is gradually, but slowly, declining. We want to maintain our relationship with the U.S. and address underlying trade issues.”

HUW PILL, CHIEF ECONOMIST

• May 20: “My vote in May leaned towards a ‘skip’ in monetary policy restriction continuation, not a halt to it. Disinflation must reach targets before restrictions can ease further.”
• May 9: “The analysis does not indicate a major shift in the UK economy due to recent trade uncertainties.”

CLARE LOMBARDELLI, DEPUTY GOVERNOR

• May 12: “Caution remains appropriate; I’ll feel more confident when I see sustained data deceleration.”

SARAH BREEDEN, DEPUTY GOVERNOR

• June 3: “I believe there’s a rationale for cutting the Bank Rate due to the ongoing domestic disinflation.”

ALAN TAYLOR, EXTERNAL MPC MEMBER

• May 30: “There’s concern about a lower monetary policy path due to increasing global risks.”

MEGAN GREENE, EXTERNAL MPC MEMBER

• June 7: “There’s a significant risk regarding second-round inflation effects, even though current trends are moving positively.”

SWATI DHINGRA, EXTERNAL MPC MEMBER

• June 3: “The risks to inflation and growth seem tilted to the downside, influenced heavily by energy prices rather than a supply-demand imbalance.”

CATHERINE MANN, EXTERNAL MPC MEMBER

• June 2: “Further rate cuts might conflict with the need to maintain restrictiveness in labor and product markets.”

DAVE RAMSDEN, DEPUTY GOVERNOR

• May 8: “I am concerned about the lack of productivity recovery, which could push inflation higher than our baseline forecast.”