In 2025, the UK's economic growth has faced notable instability, with initial strong performance declining sharply by April. Global political events, especially conflicts in the Middle East, have led to a spike in oil prices, contributing to inflation significantly above the Bank of England's targets. Despite expectations of interest rate cuts, the Bank of England opted for an unforeseen pause in June due to economic uncertainties, particularly in response to rising energy costs. With inflation at 3.4%, future rate movements depend on the evolving geopolitical climate and its effects on the UK economy.
The UK economy has proven unstable in 2025 with early strength faltering sharply by April, influenced by global political events and rising oil prices.
The Bank of England's decision to pause interest rate cuts reflects economic uncertainties linked to escalating global oil prices and domestic inflation exceeding target levels.
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