UK: Bank of England Cuts Interest Rates to 4.75%
UK: Bank of England Cuts Interest Rates to 4.75%
The Facts
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.
The Spin
The BoE's decision to cut interest rates after last week's budget is a sign of confidence in Rachel Reeves's pro-growth economic plan. Whilst some will inevitably complain, and it is a well-known fact that the UK economy is in need of substantial overhaul, the Labour Government has taken the first steps in leading the country back in the right direction and will only benefit from another interest rate cut.
The BoE's analysis is clear: although good progress has been made to reduce inflation, Reeves's high cost agenda is at risk of undoing the hard work of the last two years. Given Labour's spending obsession, it is likely now that Bailey and the BoE will have to slow down interest rate cuts even further, placing greater financial pain onto millions of homeowners and working people who have been promised financial relief.