The world’s leading central banks are set for a cautious week, with the United States (US) Federal Reserve, Bank of England, and European Central Bank (ECB) all expected to hold interest rates steady at upcoming meetings.

The Fed will conclude its Federal Open Market Committee meeting tomorrow, with markets anticipating no change to the federal funds rate, which is expected to remain at 3.50–3.75%. This comes as US inflation rose to 3.3% in March from 2.4% in February, driven largely by higher energy prices linked to the Iran war. With unemployment still below 4.5% and inflation above the Fed’s 2% target, policymakers are likely to remain on hold.

A similar picture is expected in the United Kingdom, where the Bank of England is forecast to keep its benchmark rate at 3.75%, at its meeting due to be held on Thursday. Inflation there also rose to 3.3% in March, whilst growth forecasts have been dialled back substantially, reinforcing expectations that the Monetary Policy Committee will maintain a cautious stance.

In the eurozone, the European Central Bank is also expected to hold its deposit rate at 2.0%. The ECB has revised its 2026 inflation forecast upward to 2.6% while cutting its growth outlook to 0.9% (from 1.2%), reflecting the economic impact of elevated energy prices.

With inflation rising and growth forecasts being dialled back, central banks have little clear direction against which to act. Raising rates will further slow growth even as inflation worries lift. Central banks will instead look to developments in US-Iran tensions, where any easing could quickly lower oil prices and reduce global inflation pressures.