BoE Cuts Rates to 4.75% as Inflation Eases

The Bank of England lowered its Bank Rate by 25 basis points to 4.75% in November as expected, marking the second cut since the rate-cutting cycle began in August.

The decision saw 8 of 9 MPC members voting in favor, surpassing expectations of 7, with Catherine Mann as the only dissenting vote. This cut reflects easing inflationary pressures, with UK inflation dropping to 1.7% in September, its lowest in over three years.

Services inflation, a key measure of underlying price trends, fell to a two-year low of 4.9%, though it remains elevated. The Bank forecasts continued declines in core inflation over the medium term but expects the Labour Party's expansionary budget to add 0.5 percentage points to inflation at its peak. Inflation is projected to reach 2.5% by year-end and 2.2% by 2026, with the budget potentially increasing GDP by 0.75% at its peak within a year.

Source: Bank of England

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