FAMAGUSTA GAZETTE – The Bank of England cut its benchmark interest rate by 0.25 percentage points to 4% on Thursday, marking its lowest level since March 2023 and the fifth reduction in just over a year.
The decision came despite a rise in inflation to 3.6% in June, well above the central bank’s 2% target.
The Monetary Policy Committee voted 5–4 in favor of the cut, citing weak economic growth, rising unemployment and a cooling labor market as key factors behind the move.
The central bank also revised its growth forecast for the British economy in 2025, projecting an expansion of 1.25%, up from previous estimates.
Governor Andrew Bailey said the Bank remained committed to returning inflation to its target but emphasized a cautious approach to further rate reductions.
The vote split reflected growing uncertainty among policymakers, with some warning that inflation could climb to 4% in September.
The rate cut is expected to ease pressure on borrowers, though officials signaled that future adjustments would depend on economic data and inflation trends.