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Business|Bank of England Cuts Interest Rates as British Economy Weakens
https://www.nytimes.com/2025/02/06/business/bank-england-interest-rates.html
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The central bank cut rates for the third time in about six months as it said growth had been weaker than expected.
Feb. 6, 2025, 7:18 a.m. ET
The Bank of England cut interest rates on Thursday for the third time in about six months, amid signs of weak economic growth in Britain and an unexpected slowdown in inflation.
Policymakers cut the key rate a quarter point to 4.5 percent as the bank lowered its forecasts for economic growth this year. Two members of the nine-person rate-setting committee voted to lower rates by a larger half-point move.
Andrew Bailey, the governor of the central bank, said policymakers would take “a gradual and careful approach to reducing rates further” as they monitored economic developments in Britain and abroad.
The inflation rate slowed slightly to 2.5 percent in December, when economists had been expecting the rate to hold steady. Crucially, inflation in the services sector, which has been particularly stubborn, slowed to 4.4 percent from 5 percent in November.
Even as inflation has dropped substantially from its double digit highs just a couple of years ago, the Bank of England has been particularly cautious in easing monetary policy. Last year, it cut rates less than its counterparts in the United States, Canada and the eurozone.
British policymakers remained concerned about lingering inflationary risks, particularly as wage growth remained relatively strong, and uncertain about the impact of recent spending and tax changes by the government.
