LIVE: Bank of England cuts interest rates to four per cent
The Bank of England has slashed interest rates to the lowest level in more than two years at four per cent.
The decision to cut rates from 4.25 per cent comes after members were told to vote for a second time after facing a split decision.
It follows the Bank’s chief economist, Huw Pill, telling an audience of bankers and economists that the pace of rate-cutting had to slow down to curb high inflation.
The members who voted for rates to be held were Megan Greene, Clare Lombardelli, Catherine Mann and Huw Pill.
External Member Alan Taylor had voted for a 50 basis point cut but changed to a 25 basis point reduction in the second vote, joining governor Andrew Bailey, deputy governor Dave Ramsden, Sarah Breeden and Swati Dhingra.
“We have cut interest rates today, but it was a finely balanced decision,” Bailey said.
“Interest rates are still on a downward path, but any future rate cuts will need to be made gradually and carefully.”
This comes after Pill voted against the consensus to hold interest rates at a decision in May.
The Bank opted to keep interest rates at 4.25 per cent at the last decision back in June, although three policymakers – external members Dhingra, Taylor and Ramsden – voted for a 25 basis point cut.
Economists have largely focused on the impacts of a deteriorating jobs market and price-setting behaviour as factors pulling inflation in opposite directions.
But President Trump’s tariffs, tax rises and erratic energy prices are also weighing on economists’ decisions.
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