Bank of England cuts interest rates to 4.25% amid divided committee

BREAKING NEWS: Bank of England Cuts Interest Rates to 4.25% Amid Divided Committee

The Bank of England has cut interest rates from 4.5% to 4.25%, marking the lowest level since May 2023. The decision, aimed at stimulating economic activity by making borrowing cheaper, comes as the Bank seeks to support growth amid mixed economic signals.

The nine-member Monetary Policy Committee was split over the move: five members voted for the 0.25 percentage point cut, two pushed for a deeper cut to 4%, while the remaining two preferred to keep rates unchanged.

Lower interest rates typically reduce the cost of borrowing, including mortgages, encouraging spending and investment. However, they also mean lower returns for savers.

Alongside the rate cut, the Bank released new forecasts predicting stronger UK economic growth in the short term, though growth is expected to slow in subsequent years.

Bank of England Governor Andrew Bailey welcomed the UK’s newly announced tariff deal with the United States but noted that he had not yet been briefed on its full details.