Bank of England cuts UK interests rates for first time in four years

0:00
essa Bank of England has finally cut interest rates for the first time in four years
0:05
from 5.25% to 5%. Five members of the Monetary Policy Committee, including Governor Andrew Bailey
0:13
voted to reduce the bank rate by two five basis points, while four, including chief economist Hugh Pell, backed another hold
0:21
So what does this all mean? Well, since lifting rates to a 16-year high in August, the bank has kept rates
0:29
at 5.25% despite protests from businesses, politicians and some prominent economists. Investors were genuinely uncertain about what the bank would decide today given the different
0:42
announced on inflation over the past few months. The bank's usual response to rising inflation
0:49
is to increase the UK's official interest rates. And while the headline rate of inflation
0:54
is back at 2%, measures of underlying inflationary pressure remain stubbornly high Services inflation a good gauge of domestic price dynamics remained stuck at 5 in June and has not made significant progress since February Wage growth is also running too hot for rate settlers to feel confident that inflation is returning to the target sustainably
1:19
However, unemployment has increased significantly since the end of last year, which should help ease wage pressure
1:26
And even though rates have been held steady since last August, economic growth has actually accelerated and a sign that the economy is withstanding the pressure from tight months
1:36
monetary policy. But looking to the months ahead, members in favour of a cut saw enough evidence
1:43
to feel confident that inflationary pressures are eventually starting to dissipate. Today's
1:47
decision to cut interest rates means that rates on mortgages and savings could shift and help
1:54
bring down repayments, which in theory could mean some landlords pass lower mortgage costs
2:00
onto their tenants, resulting in cheaper rent. Alongside the interest rate decision, the bank
2:05
published its latest economic forecasts which showed inflation picking up to around 2.7% by the end of the year
2:13
Here at City AM we would like to know do you think rate setters made the right call by cutting interest rates
2:19
and how is this going to impact you? Let us know in the comments

Bank of England cuts UK interests rates for first time in four years

cityam.com

Will Trump's tariffs impact Bank of England's interest rates decision?

How Trump's tariffs impacted Bank of England's interest rates cut

Economists expect the Bank of England will hold interest rates

How rising inflation will impact the UK economy in 2025

How will interest rates impact the UK economy?

What you should know about UK unemployment rate and wage growth

Will the Bank of England cut interest rates now that inflation has dropped to 3.4%?

UK Inflation falls to 2.3% after three years – how will this impact Brits and the price of goods?

UK General Election: Did Keir Starmer's Labour victory over the Tories impact UK markets?

FTSE 100 gender balance is 117 years away and UK businesses set to go bust | VERY Brief Headlines

Inflation Explained: Will inflation remaining at 4% affect the UK's cost of living crisis?

Disposable vapes banned in the UK, and London house prices the most affordable since 2016 #housing

The Hidden Marriott Credit Card Strategy Nobody Talks About

How the Bank of England keeps the money moving in the UK | City Week 2025

Cal Barton: Banking Changes in 2026 - Account Freezes Coming?

Up next in 10

Bank of England cuts UK interests rates for first time in four years

cityam.com