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(Bloomberg) -- Three of the Bank of England’s more dovish members decided against another immediate interest-rate cut, as the central bank held policy steady in the face of a turbulent global backdrop.

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.

The BOE is the latest central bank to adopt a more wary tone as policy is thrown up in the air by US President Donald Trump’s tariffs crusade.

The vote split put support for an immediate reduction at the lowest in six months, prompting traders to trim bets on a move in May to a 65% probability, compared with 70% before the decision.

“It shows a clearly hawkish tilt compared to the vote split last month,” said Thomas Pugh, economist at RSM UK. “The risks are clearly that strong wage growth persists, and that firms are more aggressive in passing on increasing costs than assumed, which would result in fewer rate cuts.”

Two BOE 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 February 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.

What Bloomberg Economics Says...

“The Bank of England was a little more hawkish than we expected in March, with only one policymaker dissenting in favor of an immediate rate cut. Our base case is that the central bank cuts rates three more times this year with the next move in May. But we think there is an increasing risk that the BOE eases by less than we expect, and perhaps pauses in the second half.”

—Dan Hanson and Ana Andrade. Click to read the REACT

The upheaval caused by Trump since he returned to the White House loomed large over the BOE meeting, which came just hours after the Federal Reserve’s latest decision. On Wednesday, the Fed 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.

“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 MPC reiterated its guidance for “gradual and careful” loosening. However, the minutes also 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.

“That shows rate-setters want to keep the flexibility to skip a cut at a quarterly meeting this year,” said Robert Wood, chief UK economist at Pantheon Macroeconomics.

Coming ahead of the government’s spring economic statement next week, Chancellor of the Exchequer Rachel Reeves acknowledged there was “still work to do to ease the cost of living.”

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 that could exert upward pressure on wages and prices.

Figures on Thursday morning showed wage growth held at a nine-month high and employment rose in a sign of resilient demand for labor. 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.

“Pay growth will remain key to future MPC decisions, and committee members will presumably want to see falls in wage growth from current high levels before reducing the restrictiveness of monetary policy,” said Jessica Hinds, economist at Fitch Ratings.

--With assistance from Harumi Ichikura, Naomi Tajitsu, Aline Oyamada and Greg Ritchie.

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