Central banks across Europe and Asia faced pivotal decisions this week, as policymakers weighed the delicate balance between taming inflation and supporting economic growth. The Bank of England, Malaysia’s central bank, and the Czech National Bank all convened to determine whether to hold or cut key interest rates—each grappling with unique domestic pressures and global economic currents.
In the United Kingdom, all eyes were on the Bank of England’s Monetary Policy Committee (MPC) as it prepared for what many analysts called one of its most closely contested meetings in recent years. On November 6, 2025, the MPC was widely expected to keep its base interest rate steady at 4%, a decision echoing September’s 7-2 vote in favor of a hold. However, this time, the outcome was less certain. As reported by BBC and GB News, deep divisions had emerged within the committee, with speculation swirling that Governor Andrew Bailey might cast a decisive vote if the panel split 5-4.
The debate centered on the latest inflation data and the looming fiscal policy changes. UK inflation in September clocked in at 3.8%—well above the Bank’s 2% target, but lower than economists had expected. Food and drink prices, in particular, rose at their slowest rate in over a year, offering some relief to families but not enough to dispel concerns about persistent inflation. According to The Times, the Bank had already reduced its benchmark rate by 0.25 percentage points every three months since August 2024, bringing it down from a peak of 5.25% to the current 4%.
Grant Slade, UK Economist at Morningstar, captured the uncertainty: “We expect the BoE to hold the Bank Rate steady at 4%. Still, we think the decision will prove a closer call for the Monetary Policy Committee, than it was during the bank’s September meeting.” Slade went on to predict that the Bank would likely deliver one final cut after its next meeting on December 18, suggesting that the committee was not yet ready to loosen monetary policy further, but might do so once it had more clarity on fiscal developments.
Indeed, the upcoming Budget, scheduled for November 26, 2025, loomed large in the Bank’s deliberations. Chancellor Rachel Reeves had signaled her intent to focus on “getting inflation falling and creating the conditions for interest rate cuts,” but the details of her plan remained under wraps. Analysts from Barclays, Goldman Sachs, and Nomura told BBC they expected a possible rate cut in December, especially if the Budget included substantial tax increases that would not fuel inflation. Dean Turner, an economist at UBS, described the November MPC meeting as “one of the hardest to call for some time,” noting that while rates would eventually come down, “the hard part is anticipating when.”
Meanwhile, the impact of interest rate policy was already rippling through the UK housing market. Mortgage rates had fallen back to levels last seen before the market turmoil triggered by Liz Truss’s Mini-Budget in September 2022, as lenders competed for customers and anticipated future rate cuts. However, for savers, the prospect of lower rates was less welcome. Rachel Springall of Moneyfacts told BBC that many savers were feeling “demoralised” as falling returns and high inflation eroded their purchasing power.
Across the globe in Malaysia, policymakers faced a different set of circumstances. On November 6, 2025, Bank Negara Malaysia held its overnight policy rate steady at 2.75% during its final review of the year, matching the expectations of all 27 economists surveyed by Reuters. The move followed a rate cut in July—the first in five years—prompted by trade uncertainties that had clouded the country’s growth prospects. This time, with inflation subdued and economic growth holding steady, the central bank opted for caution. It projected that domestic demand would continue to support growth into 2026, signaling confidence in the resilience of the Malaysian economy despite global headwinds.
“Bank Negara Malaysia kept its overnight policy rate at 2.75 per cent, as had been expected by all 27 economists surveyed in a Reuters poll,” Reuters reported, underscoring the consensus among market watchers. The central bank’s decision was shaped by a desire to maintain stability, especially after its July rate cut, which was intended to buffer the economy against external shocks.
Meanwhile, in the Czech Republic, the central bank also leaned toward caution. Preliminary data released on November 5, 2025, showed that Czech inflation had picked up to 2.5% year-on-year in October, up from 2.3% the previous month, with services price inflation remaining elevated at 4.6%. The Czech National Bank was expected to hold its main two-week repo rate at 3.50% at its November 6 meeting—a level unchanged since May, according to Reuters and local analysts. The decision reflected ongoing inflationary pressures in the services sector and rising wages, which prompted rate setters to pause further easing despite the economy’s robust performance.
The Czech economy had grown 0.7% quarter-on-quarter and 2.7% year-on-year in the third quarter of 2025, the fastest pace since mid-2022. This growth was fueled by strong household demand and wage gains. However, rate setters remained cautious, especially with the country transitioning to a new government led by billionaire Andrej Babis’ ANO party. Expectations of looser fiscal policy under the new administration added another layer of uncertainty, as policymakers weighed the risks of stoking inflation against the need to support growth.
“The preliminary estimate for October inflation shows that some inflationary pressures are still persisting,” Petr Dufek, chief economist at Banka Creditas, told Reuters, noting that price growth was likely to stay within the central bank’s tolerance band in the months ahead.
Globally, central banks were watching each other closely. The US Federal Reserve had lowered its benchmark rate by a quarter point in October, bringing it to a range of 3.75% to 4%, while the European Central Bank left its rate unchanged at 2%. These moves added to the sense of uncertainty and interdependence in the international financial system, as each central bank tried to chart a course through a landscape of shifting inflation, growth prospects, and political change.
As the dust settled on this week’s decisions, it was clear that central banks were treading carefully, mindful of both the risks of acting too soon and the dangers of waiting too long. With inflation still above target in many countries but growth showing signs of fragility, the path ahead remains fraught with uncertainty—and the next round of decisions is sure to be just as closely watched.
