The Monetary Policy Committee voted 8 to 1 in favor of leaving the benchmark policy rate at 4.5%, with more policymakers favoring a cautious approach than had been expected by economists. It put support for an immediate reduction at the lowest in six months.

Traders trimmed bets on a rate reduction in May. Swaps pricing implied around a 65% chance of a quarter-point cut in May, compared with 70% before the decision.

“The vote split of 8-1 was hawkish for the market looking for 7-2,” said Jordan Rochester, head of FICC strategy at Mizuho Bank Ltd., while adding that BOE Governor Andrew Bailey had been playing down the significance of the vote split.

Two rate-setters that have supported lower borrowing costs at the previous three meetings — Deputy Governor Dave Ramsden and Alan Taylor — voted for no change in policy, as did Catherine Mann who shocked markets by backing a bumper half-point reduction in February. Arch-dove Swati Dhingra voted for a quarter-point cut, scaling back her call for half a point.

The pound pared an earlier loss to trade 0.2% lower at $1.2976. Gilts held gains with yields as much as six basis points lower across the curve, with traders still pricing 53 basis points of additional rate reductions by year-end.

The minutes said there was “no presumption that monetary policy was on a pre-set path over the next few meetings,” suggesting that a cut in May wasn’t certain. While the BOE has been on a once-a-quarter easing cycle since last August, confidence among market traders that the next move will come in May has shrunk in recent weeks. They expect two more reductions this year.

Still, the guidance suggested that a darkening global economic backdrop is yet to derail the UK central bank’s plan for a “gradual and careful” loosening.

“There’s a lot of economic uncertainty at the moment. We still think that interest rates are on a gradually declining path,” Bailey said in a statement alongside the minutes. “We’ll be looking very closely at how the global and domestic economies are evolving.”

The BOE noted rising global trade tensions, German plans to ramp up spending and more volatile financial markets. US President Donald Trump’s efforts to upend international trade and the world order are looming over central banks. On Wednesday, the Federal Reserve held rates steady for a second consecutive meeting, warning of the inflation impact of the White House’s tariffs crusade. Trump subsequently attacked the Fed’s decision.

In the UK, monetary policy officials are having to weigh up a weak domestic economy — which was already struggling to gain traction before geopolitical tensions mounted — against a resurgence in prices driven by higher energy bills.

While Britain has largely been spared much of the direct pain from US tariffs so far, it is expected to be hit by the broader economic fallout as global demand and confidence weaken. Bailey has warned of a potentially substantial impact on the UK from a trade war, even if the exact effect on inflation “can be ambiguous.”

Some of the BOE’s most dovish rate-setters had already sounded a more cautious tone in the run-up to Thursday’s meeting. Ramsden shifted back to the center-ground of the committee, highlighting concerns over firms’ plans to hike wages by almost 4% in 2025. Taylor has also become more wary, saying his certainty over the inflation outlook has “gone down substantially.”

The BOE confirmed forecasts predicting that inflation will hit almost double its 2% target, rising to 3.75% later this year. While officials believe the price spike will be caused by temporary factors, the minutes aired concerns about high inflation expectations among both consumers and businesses.

Figures on Thursday morning showed wage growth held at a nine-month high and employment rose in a sign of resilient demand. The minutes played down the strong pay data but said members would keep a close eye on wage settlements in the coming months, which will be an “important determinant” of future decisions.