Central Banks Pause—But the Uncertainty Has Not

NatWest’s latest “Wait and See” note argues that global policymakers are holding rates steady not because risks have eased, but because visibility has deteriorated. 

• The Bank of England held rates at 3.75%, with an 8–1 vote reflecting lingering inflation concerns tied to energy prices.
• Inflation could peak between ~4% and over 6% depending on second-round effects, while growth is expected to soften.
• Households face rising costs in energy, food, and utilities, while firms pass through prices or absorb margin pressure.
• Globally, the Fed and ECB also remain on hold, waiting for clearer signals on inflation persistence.

Policymakers are not confident enough to move. But standing still may prove just as consequential.