Interest rates cut UK: Bank of England slash rates from 4.25% to 4% in home mortgage holder boost
The latest decision on interest rates has been announced by the Bank of England.
The Bank of England has cut interest rates from 4.25 per cent to 4 per cent in another boost to home owners.
It is the fifth time in the space of a year that interest rates have been slashed.
The move will release release pressure for some mortgage holders and home buyers, as hopes are fuelled that cheaper deals will enter the market after the Bank’s base rate was lowered further.
Economists had forecast ahead of the decision that a slowdown in the UK jobs market and stagnant economic growth could prompt the MPC to ease monetary policy.
The Bank of England said UK Consumer Prices Index inflation was forecast to peak at 4 per cent next month, up from the previous 3.5 per cent.
The body said the inflation rate was set to be higher than previously thought over the next two years.
The bank has pointed towards a recent fall in wage inflation and reduced uncertainty over the impact of US tariffs as reasons for giving the green light to the latest interest rates cut.
The Bank’s Monetary Policy Committee (MPC) initially saw four of its committee vote for the 0.25 percentage point reduction, four vote to keep rates at 4.25 per cent and one, Alan Taylor, vote for a 0.5 percentage point cut.
Governor Andrew Bailey then led a second vote, where Mr Taylor gave his backing for a cut to 4 per cent, providing a majority of five to four.
Mr Bailey said: “We’ve cut interest rates today, but it was a finely balanced decision. Interest rates are still on a downward path, but any future rate cuts will need to be made gradually and carefully.”
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