UK Office for National Statistics unemployment reports

Bank of England Cuts Rate to 4.75%, Lowest in Over a Year, Signals Gradual Easing

Nov 7, 2024, 12:08 PM

The Bank of England has cut its main interest rate by 25 basis points to 4.75%, aligning with market expectations and bringing rates to their lowest level in over a year. The Monetary Policy Committee voted 8-1 in favor of the cut, with Catherine Mann dissenting to keep rates at 5%. The decision marks the second reduction this year and provides a significant boost for millions of homeowners and first-time buyers. Governor Andrew Bailey stated that rates are likely to fall "gradually from here" but emphasized they cannot be reduced "too quickly or by too much." The Bank noted that inflation fell below the target rate of 2% in September but pointed to uncertainty from fresh trade barriers and Middle East conflict. The recent budget from Chancellor Rachel Reeves is expected to lift inflation by just under half a point at its peak, add 0.75% to GDP, and the Bank has raised its inflation forecasts for 2025 and 2026 accordingly. Unemployment is now projected to fall slightly.