Central Banks Are Choosing Patience Over Precision

NatWest's Holding On reviews the latest decisions from the Bank of England and the Federal Reserve, arguing that policymakers remain reluctant to tighten further as easing inflation is balanced against persistent geopolitical and energy risks.

• The Bank of England kept Bank Rate at 3.75% for a fifth consecutive meeting, concluding that higher energy prices have yet to generate meaningful second-round inflation effects.

• UK housing and credit data suggest higher borrowing costs continue to restrain activity, although household savings, mortgage approvals and business borrowing remain relatively resilient.

• In the U.S., the Federal Reserve also left rates unchanged, but divisions within the committee and elevated Treasury yields highlight growing investor concerns that inflation could remain above target for longer.

Read the full report for NatWest's latest assessment of UK and U.S. monetary policy, inflation and growth.