David McNamara: Central banks play the waiting game

Cautioun prevails, despite global growth risks, amid poltical uncertainty in Washington

British chancellor of the exchequer Rachel Reeves has little room to manoevre to provide a fiscal boost to the UK economy. Picture: Jeff Overs/BBC/PA Wire

Last week’s US Federal Reserve and Bank of England meetings concluded as expected, with no change to rates. For now, despite global growth risks, stemming from trade tensions and reflected in a downgrade in the latest OECD macro forecasts, central banks are happy to take a ‘wait and see’ approach.

Those OECD forecasts saw a downward revision in global and US growth, particularly in 2026. Global growth is now expected at 3% in 2025 and 2026, down from around 3.3% forecast in December for both years. For the US, the OECD has revised down its near-term outlook to 2.2% in 2025 (from 2.4%) and more sharply to 1.6% in 2026 (from 2.1%), a significant slowdown compared to the near 3% rate of growth in recent years.