Central bank downgrades growth forecast amid threat from budget fallout, rising inflation and Trump trade tariffs

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The Bank of England has kept UK interest rates unchanged but warned Britain’s economy is on the brink of stagnation after Rachel Reeves’s budget as the world faces stubbornly high inflation and the risk of Donald Trump reigniting trade wars.

Holding interest rates at 4.75% in a widely expected decision, the central bank’s monetary policy committee (MPC) said on Thursday it had slashed its UK forecasts for the final three months of the year with a prediction of zero economic growth. The Bank had predicted growth of 0.3% as recently as November.