Overview
- The Bank of England left Bank Rate at 3.75% on a narrow 5–4 vote and said inflation should be around 2% by spring, with Governor Andrew Bailey noting scope for cuts this year if disinflation holds.
- UK projections were downgraded, with 2026 growth cut to 0.9% and peak unemployment now seen at 5.3%, reinforcing a cautious approach to further easing.
- Markets moved to price earlier UK cuts as sterling fell and short‑dated gilt yields declined following the decision and forecasts.
- The Reserve Bank of India’s MPC unanimously kept the repo rate at 5.25% and retained a neutral stance, slightly lifting its growth outlook to 7.4% for FY26 and nudging near‑term inflation projections higher.
- RBI guidance emphasized data dependence, liquidity management and policy transmission as domestic conditions remain supportive despite external risks.