18.12.202512:01:42UTC+00Bank of England Cuts Rate As Expected

The Bank of England has reduced the Bank Rate by 25 basis points, bringing it down to 3.75%, the lowest since 2022. This decision comes in response to moderating inflation and increasing signs of economic pressure, prompting policymakers to take action. This marks the first instance of a rate cut since August. The vote resulted in a 5 to 4 decision, with the majority supporting the cut, while four members preferred to maintain the current rates. This split was less dovish than anticipated, leading traders to adjust their expectations regarding future BOE rate cuts. The Monetary Policy Committee (MPC) indicated that any future easing of policy would be contingent on developments in the inflation outlook, noting that the level of policy restrictiveness has lessened. In November, UK inflation declined to 3.2%, the lowest it has been in eight months and below the Bank of England’s projection of 3.4%. Additionally, GDP saw a second consecutive monthly contraction in October, and private-sector wage growth continued to decelerate.