The Bank of England (BoE) kept its key interest rate at 4.5%, even though the economy is barely growing. Policymakers are also facing increased uncertainty, especially in light of tariff policies introduced by the Trump administration in the US, reports Euronews.

The decision by the nine-member Monetary Policy Committee was widely expected and comes a day after the US Federal Reserve also kept interest rates on hold. Minutes of the meeting showed that eight members voted to keep policy unchanged and one supported a quarter-point cut.

Since August last year, the rate-setting committee has cut the Bank of England's key interest rate three times from a 16-year high of 5.25% by a quarter-point, most recently in February after inflation fell from a multi-year high of more than 10%.

Inflation, currently at 3% and remaining above the bank's 2% target, will still rise in the coming months, even without factoring in any tariffs imposed by the Trump administration.

"There's a lot of economic uncertainty at the moment," said Reserve Bank Governor Andrew Bailey.

"We still think interest rates are on a gradual decline path, but today we held them at 4.5%," he added.

If politicians continue to follow their recent incremental approach, then another reduction is likely in May when Andrew Bailey holds his next press conference.

The Governor said that rate-setters will be "looking very carefully at how the global and domestic economies evolve" and that whatever happens, "our job is to ensure that inflation remains low and stable".

The U.S. Federal Reserve, which on March 19 kept lending rates unchanged, also expressed uncertainty about the near-term economic outlook. It highlighted the risks posed by US President Donald Trump's tariff policy, which economists say will lower global growth and lead to higher prices.

UK inflation rose to a 10-month high of 3% in January - further above the Bank's target of 2%. Many economists believe it could reach 4% in the coming months, even before US-imposed tariffs are taken into account.

Britain's economy, the sixth-largest, grew a modest 0.1% in the fourth quarter - an extremely disappointing result for the new Labour government, which has made stimulating growth its main economic policy.

Since the global financial crisis in 2008-2009, the UK economy has grown significantly below its long-term average. | BGNES