Bank of England Cuts Interest Rate by 25 Basis Points to 5% in 5-4 Vote

Aug 1, 2024, 11:05 AM

The Bank of England has cut its key interest rate by 25 basis points to 5%, marking the first reduction since March 2020. This decision, which brings an end to the joint-longest peak in rates since the Bank was granted independence, was made by a narrow 5-4 vote by the Monetary Policy Committee, with Governor Andrew Bailey among those voting for the cut. The rate cut comes amid signs of slowing inflation in the UK, which recently hit the Bank's 2% target. The Bank of England has cautioned against cutting rates too quickly or by too much, signaling a cautious approach to future rate adjustments. The reduction follows similar moves by other central banks, including those in Canada, Denmark, Switzerland, and the EU. The interest rate was previously at a 16-year high of 5.25%.