Bank of England cuts interest rates

The Bank of England’s Monetary Policy Committee (MPC) has reduced interest rates from 5% to 4.75%, marking the second cut this year. Governor Andrew Bailey noted that the drop is due to UK inflation falling below the 2% target, allowing for a gradual reduction in borrowing costs. He stated: “We need to make sure inflation stays close to target, so we can’t cut interest rates too quickly or by too much.” The recent autumn Budget, which includes tax increases for businesses, is expected to boost economic growth by 0.75% at its peak in a year. However, the MPC highlighted “significant uncertainty” regarding the jobs market and inflation, particularly with upcoming national insurance tax increases and a higher minimum wage.