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UK interest rates cut to 4.75% but Bank hints fewer falls to come

Moneyweekuk

Live: Bank of England cuts interest rates to 4.75%

ABC News

Bank of England is set to cut interest rates despite potential new inflation worries

Independent

Bank of England cuts interest rates to 4.75% – but mortgages still set to rise

Sky News

Interest rate cut - but budget means inflation will rise, Bank says

Interest rates: Bank of England cuts interest rates to 4.75%, in second reduction this year

CNBC

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Guardian

City analysts overwhelmingly predict Bank of England interest rate cut

UK interest rates cut to 4.75%, as Bank of England warns budget will add to inflation – business live

Bank of England cuts interest rates by 0.25 points to 4.75%

Ignore the doom-mongers: the good news on interest rates shows Labour is on the right track

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Oxford Economics

Centre for Economics and Business Research

Andrew Bailey

National Institute of Economic and Social Research

Dave Ramsden

ING Bank

Citigroup

Pantheon Macroeconomics

Sanjay Raja

Office for Budget Responsibility

When Will Inflation Reach the Bank of England’s 2% Target?

Mel Stride

Bim Afolami

The Vanguard Group

Sarah Breeden

OECD

Jonathan Haskel

Huw Pill

Catherine Mann

Capital Economics

Ben Broadbent

Adam Posen

"I think cuts are a long way off.”

"The MPC's [Monetary Policy Committee's] latest projections indicate that monetary policy is likely to need to be restrictive for an extended period of time."

“[T]he Bank of England will need to keep interest rates higher for longer.”

"It is likely that we'll need to cut bank rates in the coming quarters, possibly more so than is currently priced into markets."

"It's not unreasonable to believe that through the summer... bank rate [cuts] will come under consideration."

"[I]t's possible Bank Rate could be cut some time over the summer."

"We foresee a first rate cut in August, with total cuts of 1 percentage point in 2024."

"We think slowing wage growth and inflation will trigger a rate cut in August."

"We think a June rate cut is growing more likely but is far from guaranteed."

We think "the first interest rate cut from the Bank of England will happen in June this year rather than in November... [and] rates will be reduced from 5.25% now to 3.00% in 2025."

"[W]e expect interest rates to start falling in May of this year and reach 4.5 per cent by the end of 2024."

When Will the Bank of England Cut Interest Rates?

The Bank of England (BoE) has cut interests rates to 4.75% – down 0.25 points from 5%. This is the second interest rate cut by the BoE this year.

The BoE's monetary report summary states the decision, which was passed in an 8-1 vote by the Monetary Policy Committee (MPC), was based upon "continued progress in disinflation" – citing in particular "abated" external shocks.

In August, the BoE began cutting interest rates from a 16-year high of 5.25%, having risen 14 consecutive times between Mar. 2020 and Dec. 2021 as inflation hit a peak of 11.1% in Oct. 2022.

Verity

BoE Gov. Andrew Bailey stated that, despite Thursday's announcement, interest rates would not be cut in future "too quickly or too much," and that based on expected economic forecasts rates would "continue to fall gradually from here."

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In the year to Sept. 2024, Consumer Price Index (CPI) inflation fell to 1.7%, sitting below the BoE target of 2%. However, the BoE estimates that inflation will rise to an average of 2.4% Q4 this year, reaching 2.8% by Q3 2025, before decreasing to 2.2% Q4 2026, and falling further to 1.8% in Q4 2027.

Consumer price inflation

The Bank has estimated that, following Labour's budget last week, inflation will increase by 0.5 points at its peak compared to previous forecasts and GDP growth will also be raised by 0.75 points at its peak. Following the BoE decision, the Pound Sterling has seen a 0.10 point increase on the Euro, and a 0.70 point raise against the US Dollar.

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UK: Bank of England Cuts Interest Rates to 4.75%

UK: Bank of England Cuts Interest Rates to 4.75%

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UK: Bank of England Cuts Interest Rates to 4.75%

The Controversies

Haskel

England

Posen

Bailey

Pill

Broadbent

Group

Afolami

Bank

Economics

Research

Articles on this story

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