LONDON – The Bank of England is set to keep U.K. interest rates unchanged Thursday even though the economy is barely growing and set for further uncertainty in light of the tariff policies being enacted by the Trump administration in the U.S.

The nine-member Monetary Policy Committee is expected to keep the bank’s main interest rate at 4.50%, given that inflation remains above target and set to go higher in the coming months, as firms are expected to raise prices as a result of a big increase in the minimum wage and higher payroll taxes.

Inflation in the U.K. rose to a 10-month high of 3% in January — further above the bank’s target of 2%. And many economists think it could rise as high as 4% in the coming months.

The rate-setting panel has reduced the bank’s main rate from a 16-year high of 5.25% by a quarter of a percentage on three occasions since last August, most recently in February, after inflation fell from multi-decade highs of over 10%.

If it pursues this gradual approach, then it would cut again at its next meeting in May, when it will be armed with the bank’s latest economic projections and Gov. Andrew Bailey next holds a press conference. The minutes accompanying Thursday’s decision will give financial markets a better steer about whether a May cut is as nailed-on as many economists think.

The British economy, the sixth-largest, eked out modest growth of 0.1% in the fourth quarter, a hugely disappointing outcome for the new Labour government, which has made boosting growth its number one economic policy. Since the global financial crisis in 2008-9, the British economy’s growth performance has been notably below its long-run average.

Critics say Treasury chief Rachel Reeves has been partly responsible for the gloomy economic news since Labour returned to power in July after 14 years, because she was overly downbeat when taking on her role and has since increased taxes, particularly on businesses.

There’s also the complication of U.S. President Donald Trump’s tariff policies, which economists worry would lower global growth and lead to an uptick in prices. British Prime Minister Keir Starmer is hoping that a modest trade deal will spare widespread tariffs being slapped on U.K. imports into the U.S.