The Bank of England has cut interest rates for the first time since March 2020 cutting the borrowing rate from 5.25 per cent to 5 per cent
The Bank said that expects the UK economy to grow 1.25 per cent this year, higher than its last forecast, but kept its outlook for 2025 the same at 1 per cent
The cut in rates will relieve some pressure on households and businesses struggling in cost of living crisis and brings to an end the joint-longest peak in rates since the bank was granted independence in 1997
The Monetary Policy Committee voted 5-4 for the cut.They said that the impact of ‘past external shocks’ – particularly energy bills – has abated but added they were cautious about prospect of future cuts, saying that interest rates will have to remain high until risk of another spike in inflation has dissipated
The Chancellor Rachel Reeves said the cut in interest rates will be welcome news, but millions are still facing higher mortgage rates after the disastrous mini-budget.
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