Interest Rate Cut by the Bank of England
The Bank of England (BoE) announced its interest rate decision by reducing it by 25 basis points to 4.5 percent.
Having cut interest rates for the third time since August, the bank made its latest change in November.
Market expectations were met as BoE decided to lower interest rates by 25 basis points today. During the Monetary Policy Committee (MPC) meeting, 7 members, including BoE Governor Andrew Bailey, voted in favor of a 25 basis points interest rate reduction, while 2 members suggested a 50 basis points cut.
The announcement highlighted that while annual inflation in the UK stood at 2.5 percent in the last quarter of the previous year, inflationary pressures, despite easing, still remained high.
BoE significantly slashed its economic growth forecast for this year from 1.5 percent to 0.75 percent by November 2024.
Governor Bailey remarked on the decision, stating, “We will closely monitor the UK economy and global developments. We will adopt a gradual and cautious approach towards further interest rate cuts.”
Following the decision, the British pound depreciated nearly 1 percent against the US dollar, falling to 1.2359 levels.
The Bank’s next interest rate decision will be announced on 20 March.
