UK Cuts Base Interest Rate by 0.25%p to 4.25% Annually

▲Pound Sterling

The Bank of England (BOE), the central bank of the United Kingdom, held a meeting of the Monetary Policy Committee (MPC) on May 8 (local time) and decided to lower the base interest rate by 0.25 percentage points (p) to 4.25% per annum. This decision was in line with market experts' expectations.

Out of the nine members of the Monetary Policy Committee, five supported a 0.25 percentage point cut, two advocated for a 0.5 percentage point cut, and the remaining two favored keeping the rate unchanged.

This is the fourth time the United Kingdom has cut its base interest rate since the middle of last year. Previously, the rate had been raised to 5.25%, the highest level in 16 years, but was subsequently reduced by 0.25 percentage points each time in August and November of last year, in February of this year, and again this month.

The Bank of England adjusts the base interest rate with the aim of achieving an annual inflation rate of 2%. For the year ending in March 2025, the consumer price inflation rate was 2.6%.