Since inflation in the UK has fallen from its extreme high in 2022, the Bank has steadily decreased its interest rate over the past year, easing the pressure on people with a mortgage to pay.

The Indian rupee is expected to slip past 86 to the U.S. dollar at the open on Friday, hit by surging oil prices and sliding risk assets after Israel attacked targets in Iran.

Entering the meeting, markets are pricing two interest rate cuts from the Fed in 2025, in line with the central bank's median dot plot projection from March. But since then, there have been significant changes to tariff policy, which will put any updates to the Fed's outlook in particular focus.

President Donald Trump has repeatedly demanded the Federal Reserve slash interest rates. But Fed officials have stood pat, waiting to see how his administration’s sweeping policy changes affect the economy first.

Oil prices settled slightly lower on Thursday as traders booked profits from a 4% rally in the prior session, driven by concerns that worsening tensions in the Middle East could cause supply disruptions.

Crude oil scored its largest single-day gains in more than three years after Israel launched air strikes against Iran's nuclear sites and other military targets but not oil infrastructure

The US ordered some staff to leave its embassy in Baghdad, and restricted government employees and family members in Israel from traveling outside major cities like Tel Aviv. Around the same time, risk warnings from naval forces were issued to vessels operating in and around the Persian Gulf,

Policymakers are expected to stand pat on rates, but the devil will be in the detail of its statement and Governor Kazuo Ueda's news conference. The BOJ has vowed to keep raising rates if underlying inflation approaches its 2% target, but the path ahead has become less certain.