LONDON (AP) — The Bank of England warned Thursday about the “highly unpredictable” geopolitical environment as it kept its main interest rate unchanged at the two-year low of 4.25%.
With concerns mounting over the conflict between Israel and Iran, and uncertainty over U.S. President Donald Trump's tariff agenda, rate-setters at the bank were widely expected to keep borrowing costs on hold as they await developments.
However, the news that three of the nine policymakers on the Monetary Policy Committee voted to cut rates by a quarter of a percentage point has swelled market expectations that rates will be cut again in August.
Minutes to the meeting showed that policymakers were mindful of how the conflict in the Middle East will impact on oil prices, which have risen sharply in recent days to over $75 a barrel.
The prevailing view at the bank was that inflation, which currently stands at 3.4%, would remain high over the coming months but start to head back towards next year especially as unemployment has started to rise, a development that can keep a lid on wage demands and hence lower inflation. The uptick in oil prices has the potential to offset that.
“Interest rates remain on a gradual downward path, although we’ve left them on hold today," bank governor Andrew Bailey said. “The world is highly unpredictable."
Since its first quarter-point rate cut last August from the 16-year high of 5.25%, the Bank of England has played it steady, reducing interest rates every three months. That would mean the next reduction is in August.
Economists believe that remains the most likely outcome but cautioned that geopolitical events could prompt a reassessment.
“Further escalation of the conflict in the Middle East could push up on U.K. inflation, which could see the Bank move more cautiously,” said Felix Feather, an economist at asset management firm Aberdeen.
The cuts have come even though inflation has been above the bank's target rate of 2% for most of that time. Rate-setters can't do much about current inflation so set policy on a longer-term horizon, such as over two years.
Uncertainty over the level of tariffs U.S. President Donald Trump will impose around the world is also clouding the outlook for prices around the world. Though the U.K. looks like it will be spared a raft of tariffs, the backdrop for the global economy remains highly uncertain.
The tariff issue is at the forefront of concerns at the U.S. Federal Reserve, which on Wednesday kept its key rate unchanged, to the chagrin of Trump, who has been urging the central bank to join others, such as the Bank of England and European Central Bank, and cut borrowing costs.
FILE - A general view of the Bank of England in the City of London, Thursday, March 17, 2022. (AP Photo/Alastair Grant, File)
CINCINNATI (AP) — After opening the season as the starting quarterback for the Cleveland Browns facing the Cincinnati Bengals, Joe Flacco will close the season as the backup for the Bengals as they face the Browns on Sunday.
Flacco was dealt to the Bengals in October and made six starts for the Bengals while Joe Burrow was out with a toe injury.
“I don’t really think about putting a label on it,” Flacco said. “It’s crazy. Seasons always go by quick once they’ve started. But the way that this one went, it seems like it flew by.”
During the summer, in Cleveland Browns training camp, Flacco won a competition for the starting quarterback job and made four starts for Cleveland. In Week 1 against the Bengals, Flacco threw for 290 yards.
He said that over the past 17 weeks, he has seen improvement from the Bengals defense. Now, he refers to the Bengals defense as his team’s defense.
“We’re stopping the run,” Flacco said. “We’re getting more pressure on the quarterback. When you combine those two things, it’s going to help you out.”
While Flacco went 1-5 as a starter in Cincinnati, the 40-year-old played well. He threw for at least 200 yards in four of his six starts, and the Bengals offense averaged more than 27 points per game.
Flacco said that he developed a lot of respect for Bengals coach Zac Taylor.
“He has a lot of strengths,” Flacco said. “He’s really good at what he does. His demeanor, his overall personality and the way he leads men is really good. The way he puts game plans together. Also, he’s willing to allow it to be collaborative. That’s a strength. His game day play-calling is also something he does really well.”
Burrow took over as the starter when he returned on Thanksgiving, and Flacco has been the backup over the past month.
Flacco will be a free agent again at the end of the season. As he evaluates his options, he’s hoping to find another chance to play and to start.
“That’s always a priority,” Flacco said. “I’m somebody who wants to play football. You’ve got to assess and see whatever is thrown your way. You have to go from there and see what you can do about it.”
He said that he’d be open to returning to the Bengals, but he’ll weigh several factors.
“I haven’t really thought about it,” Flacco said. “I don’t hope to do anything. I have an idea of maybe of what some goals would be. I’ll go from there and see what happens.”
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Cincinnati Bengals quarterback Joe Flacco throws during pregame warmups before an NFL football game against the Miami Dolphins, Sunday, Dec. 21, 2025, in Miami Gardens, Fla. (AP Photo/Lynne Sladky)
Cincinnati Bengals quarterback Joe Flacco (16) calls a play during the second half of an NFL football game against the Miami Dolphins, Sunday, Dec. 21, 2025, in Miami Gardens, Fla. (AP Photo/Rebecca Blackwell)
