US EditionBank of England Cuts Base Rate to 4% After Split MPC Vote
- On August 7, 2025, the Bank of England’s Monetary Policy Committee lowered the base interest rate by a quarter of a percentage point, bringing it down to 4%, marking the fifth reduction since August 2024.
- This decision responded to a sluggish UK economy that grew 0.7% in early 2025 after stagnating in late 2024 while inflation and unemployment rose.
- The MPC voted 5-4 to reduce rates, balancing inflation at 3.6%, well above the 2% target, against rising unemployment to 4.7%, the highest in four years.
- Chief economic advisor Matt Swannell indicated that a quarter-point reduction in interest rates is highly likely given the economy's slow growth, while Susannah Streeter emphasized that considerable challenges still remain ahead.
- The cut aims to ease borrowing costs for households and businesses but occurs amid concerns about possible tax rises and challenges to sustained economic growth.
139 Articles
139 Articles
Bank of England cuts interest rates to 4pc
The Bank of England (BoE) cut interest rates on Thursday but four of its nine policymakers - worried about high inflation - sought to keep borrowing costs on hold, suggesting the run of rate cuts might be nearing an end. The contrasting views of the BoE's top officials meant the Monetary Policy Committee held two votes for the first time since it was created in 1997 in order to reach a decision. With the MPC facing the conflicting risks posed by…
The British markets had already largely discounted the decision, but that does not mean that it is free of controversy. The Bank of England (BoE) has decided to cut interest rates by a quarter of a point, leaving them at 4%, the lowest level in more than two years. It is the fifth reduction since the end of the pandemic. Beyond the reduction itself, the vote on the BoE Monetary Policy Committee has reflected a deep division. Five of its nine mem…
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