Bank of England Cuts Interest Rate for First Time since 2020

The Bank of England announced its first interest rate cut in more than four years on Thursday, bringing its key rate to 5%, despite UK inflation hitting the Bank of England’s 2% target for two months in a row.

The bank rate has been held at a 16-year high of 5.25% since August 2023.

While the latest period has seen two votes to cut rates and seven to keep them, some of the BoE's more hawkish policymakers have voiced concerns about wage growth and flat services inflation.

Bailey added, "Inflationary pressures have eased enough to enable us to cut rates," BoE Governor Andrew Bailey said. "But we need to make sure that inflation remains low, and be careful not to cut rates too quickly or too aggressively. Ensuring low and stable inflation is the best we can do to support economic growth and the country's prosperity."