David McNamara: US Fed and Bank of England hold the line on rates

While ECB cut rates two weeks ago, US and UK policymakers were able to take progress on US-Iran deal into account

New Fed chair Kevin Warsh’s mantra of “less is more” and is a portend of his aim to return the Fed to its inflation and employment mandates. Picture: PA

At last week’s US Fed and Bank of England meetings, both held rates steady, in contrast to the hike delivered by the ECB the prior week. The macro context for the US and UK rate decisions differed, but policymakers in each benefitted from the knowledge of a US-Iran deal which tentatively reopens the Strait of Hormuz and has seen energy prices plummet in recent days. 

While conjecture at this point, the ECB may have chosen a different path if it was aware of the extent of the deal and the market reaction.