The Central Bank of England (BOE) lowered the base rate to 4.50% per annum.
The BOE held a monetary policy committee meeting on the 6th (local time) and reduced the base rate from the previous 4.75% by 0.25 percentage points. This rate cut is the first in three months since a reduction of 0.25 percentage points in November last year.
BOE Commissioners all expressed opinions for a rate cut during the committee meeting. Seven of the nine members recommended a 0.25 percentage point cut, while the remaining two suggested a 0.50 percentage point reduction.
The UK has implemented its third rate cut since mid-last year. This rate cut has resulted in the lowest rate since June 2023. However, the pace of the UK's rate cuts is somewhat slower compared to the European Union (EU). The Central Bank of Europe (ECB) has cut rates five times since June last year.
Concerns about stagflation are cited as the reason for the UK's gradual rate cuts. The UK has been experiencing economic stagnation due to tax increases last year and the U.S. government led by President Donald Trump adopting a stance of raising trade tariffs. At the same time, prices have been rising, increasing concerns about stagflation.
Andrew Bailey, the BOE governor, noted, "We live in a world of uncertainty, and the path ahead will not be smooth."
The UK's economic growth forecast has also been lowered from the previous 1.50% to 0.75%. The inflation rate far exceeds the BOE's target of 2.0%, currently at 3.7%.
RAY Reeves, the UK finance minister, stated, "The economic growth rate is unsatisfactory, and we will accelerate growth."