The Bank of England (BOE), the central bank of the United Kingdom, lowered its base interest rate from 5% to 4.75% on the 7th (local time). This is an additional cut three months after the Monetary Policy Committee (MPC) reduced the rate from 5.25% to 5% on August 1st.
This is the second time the BOE has cut its base interest rate since March 2020. Prior to that, it raised rates 14 consecutive times until August last year. Until June this year, it held the rate steady seven times in a row, maintaining a 16-year high of 5.25%.
Eight committee members voted for the rate cut, while one member voted to keep it unchanged. Earlier, market experts surveyed by Reuters had predicted a 7 to 2 split.
The argument for a rate cut was strengthened as the consumer price inflation rate announced last month for September fell to an annual 1.7%, the lowest since April 2021. This is below the BOE’s target of 2%.
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