No Result
View All Result
SUBMIT YOUR ARTICLES
  • Login
Thursday, October 30, 2025
TheAdviserMagazine.com
  • Home
  • Financial Planning
    • Financial Planning
    • Personal Finance
  • Market Research
    • Business
    • Investing
    • Money
    • Economy
    • Markets
    • Stocks
    • Trading
  • 401k Plans
  • College
  • IRS & Taxes
  • Estate Plans
  • Social Security
  • Medicare
  • Legal
  • Home
  • Financial Planning
    • Financial Planning
    • Personal Finance
  • Market Research
    • Business
    • Investing
    • Money
    • Economy
    • Markets
    • Stocks
    • Trading
  • 401k Plans
  • College
  • IRS & Taxes
  • Estate Plans
  • Social Security
  • Medicare
  • Legal
No Result
View All Result
TheAdviserMagazine.com
No Result
View All Result
Home Market Research Economy

Bank of England cuts interest rates by a quarter point to 4%

by TheAdviserMagazine
3 months ago
in Economy
Reading Time: 5 mins read
A A
Bank of England cuts interest rates by a quarter point to 4%
Share on FacebookShare on TwitterShare on LInkedIn


Bank of England, the Royal Exchange and the statue of the Duke of Wellington in the City of London on 19th February 2025 in London, United Kingdom.

Mike Kemp | In Pictures | Getty Images

The Bank of England voted by a fine margin to cut interest rates from 4.25% to 4% on Thursday as the central bank resumed what it describes as a “gradual and careful” approach to monetary easing.

The BOE was widely expected to trim rates by 25 basis points at its latest monetary policy meeting, but traders and economists were keen to see the breakdown of support for the decision among the bank’s policymakers.

As it turned out on Thursday, the nine-member MPC voted by a majority of 5–4 to reduce the key interest rate, the “Bank Rate,” by 25 basis points rather than keeping it on hold. The British pound rose 0.5% against the dollar after the decision, to $1.3424.

Policy makers have had to weigh up sticky inflation — the consumer price index (CPI) rose to a hotter-than-expected 3.6% in June from 3.4% in May — with a cooling jobs market and lackluster growth. The U.K.’s gross domestic product contracted 0.1% month-on-month in May.

In a statement Thursday, the bank said the MPC “remains focused on squeezing out any existing or emerging persistent inflationary pressures, to return inflation sustainably to its 2% target in the medium term.”

The MPC was initially split on reducing or holding interest rates with four members wanting to hold rates, four others voting to cut and one policymaker voting for a larger 50-basis-point cut. The committee then held a second round of voting to arrive at a majority decision to cut rates by 25 basis points.

The voting is a reflection of the “finely balanced situation” the MPC currently faces in terms of the factors driving monetary policy, according to BOE Governor Andrew Bailey.

“There’s an upside risk to inflation, and particularly as to whether… this current increase could persist somewhat more than we expect it to. We don’t expect it to actually, but could it?” Bailey told CNBC’s Ritika Gupta in an interview. “But… that has to be set in the context of the labor market conditions, which appear to be softening.”

Despite the divergent views of policymakers at the BOE, economists expect the downward trajectory for interest rates to continue into next year, but the central bank reiterated its cautious approach, noting that “a gradual and careful approach to the further withdrawal of monetary policy restraint remains appropriate.”

The timing and pace of future reductions in the restrictiveness of policy will depend on the extent to which underlying disinflationary pressures continue to ease, the BOE said.

Bailey said in a press conference Thursday that it “remains important that we do not cut bank rate too quickly or by too much” but added that “there are good reasons to think that this rise in headline inflation will not persist.”

U.K. Chancellor Rachel Reeves said the central bank’s fifth interest rate cut since the last general election in July 2024 was “welcome news, helping bring down the cost of mortgages and loans for families and businesses.”

George Brown, senior economist at Schroders, said the latest rate cut was no surprise, but said “the path forward is anything but clear.”

“Jobs, growth and inflation figures all call for different policy prescriptions, as reflected in the unprecedented two rounds of voting needed to reach a majority,” he said in emailed comments Thursday.

“Given the uncertainty presented by the conflicting data, the committee is right to stick to its ‘gradual and careful’ mantra,” he said, adding: “Nervousness about the labour market might prompt another cut in November. But this will be difficult to justify unless disinflation is clearly underway. As such, we think there is a decent chance rates will not fall below the current rate of 4% this year.”

Bank of England narrowly votes to cut interest rates to 4%

Some economists believe the central bank could go further, however.

“Despite the unexpected rise in CPI inflation in June, we still think the weakness in the labour market means it’s only a matter of time before wage growth and inflation slow to rates consistent with the 2% inflation target,” Ashley Webb, U.K. economist at Capital Economics, said ahead of the decision.

“We think the Bank of England will cut interest rates from 4.25% now to 3.00% in 2026, which would take rates below the low of 3.50% priced into the financial markets,” he said in a note Wednesday.

No ‘smoking gun’

Economists pointed to the labor market as a key factor in policymakers’ decisions, but said there was no “smoking gun” or conclusive evidence of a solid downturn in employment figures.

“The question looming over this meeting is whether a more worrisome deterioration in the jobs market is imminent,” James Smith and Chris Turner from ING said in a note, adding that “slack is undoubtedly building.”

A waiter prepares a restaurant terrace ahead of opening in London, UK, on Wednesday, June 18, 2025. U.K. employment plunged by the most in five years and wage growth slowed more than forecast.

Bloomberg | Bloomberg | Getty Images

“Payrolled employee numbers have fallen in seven out of the past eight months. The unemployment rate has risen by a few tenths of a percentage point this year … [and] vacancy data from Indeed suggests the U.K. jobs market has cooled further than in other major economies,” they noted.

But the analysts flagged this is a “slow-moving story,” with much of the weakness in the employment numbers concentrated in the hospitality sector, which was disproportionately affected by recent government tax hikes to the national minimum wage and payroll taxes.

“In other words, there’s no smoking gun that might prompt a fundamental rethink in the Bank’s outlook just yet. Meanwhile, the inflation data is still proving sticky,” the ING analysts said.



Source link

Tags: bankcutsEnglandinterestpointquarterrates
ShareTweetShare
Previous Post

How to get back-to-school deals, and other ways to save money this fall

Next Post

Sun TV Network Q1 net profit dips amid ad revenue decline

Related Posts

edit post
By All Means, Elect Mamdani and Watch His Socialist Laboratory at Work

By All Means, Elect Mamdani and Watch His Socialist Laboratory at Work

by TheAdviserMagazine
October 30, 2025
0

Next week, New York City voters almost surely will send self-proclaimed socialist Zohran Mamdani to Gracie Mansion, and he promises...

edit post
Nationalism – Good or Bad?

Nationalism – Good or Bad?

by TheAdviserMagazine
October 30, 2025
0

Conor here: Richard Murphy offers up a defense of nationalism based on a politics of care. He deals with the...

edit post
Radioactive Tsunamis | Armstrong Economics

Radioactive Tsunamis | Armstrong Economics

by TheAdviserMagazine
October 30, 2025
0

Humans continue to devise innovative ways to kill one another. Bullets simply will not suffice in modern warfare. Moscow has...

edit post
Xi strikes conciliatory tone as he meets Trump in South Korea

Xi strikes conciliatory tone as he meets Trump in South Korea

by TheAdviserMagazine
October 29, 2025
0

BUSAN, SOUTH KOREA - OCTOBER 30: U.S. President Donald Trump greets Chinese President Xi Jinping ahead of a bilateral meeting...

edit post
Ice Barbie Kristi Noem on the Bleeding Edge of Trump Era Conflict

Ice Barbie Kristi Noem on the Bleeding Edge of Trump Era Conflict

by TheAdviserMagazine
October 29, 2025
0

The MSM calls her ICE Barbie, but Kristi Noem, and the sprawling empire she rules as Secretary of the Department...

edit post
How Food Industry Lobbyists Keep the Food-Stamp Gravy Train Going

How Food Industry Lobbyists Keep the Food-Stamp Gravy Train Going

by TheAdviserMagazine
October 29, 2025
0

Unless members of Congress intervene to prevent it, the food stamp program—also known as the Supplemental Nutrition Assistance Program (SNAP)—will be...

Next Post
edit post
Sun TV Network Q1 net profit dips amid ad revenue decline

Sun TV Network Q1 net profit dips amid ad revenue decline

edit post
Three Questions State And Local Government Leaders Must Ask Themselves TODAY

Three Questions State And Local Government Leaders Must Ask Themselves TODAY

  • Trending
  • Comments
  • Latest
edit post
77-year-old popular furniture retailer closes store locations

77-year-old popular furniture retailer closes store locations

October 18, 2025
edit post
Pennsylvania House of Representatives Rejects Update to Child Custody Laws

Pennsylvania House of Representatives Rejects Update to Child Custody Laws

October 7, 2025
edit post
What to Do When a Loved One Dies in North Carolina

What to Do When a Loved One Dies in North Carolina

October 8, 2025
edit post
Another Violent Outburst – Democrats Inciting Civil Unrest

Another Violent Outburst – Democrats Inciting Civil Unrest

October 24, 2025
edit post
Probate vs. Non-Probate Assets: What’s the Difference?

Probate vs. Non-Probate Assets: What’s the Difference?

October 17, 2025
edit post
California Attorney Pleads Guilty For Role In 2M Ponzi Scheme

California Attorney Pleads Guilty For Role In $912M Ponzi Scheme

October 15, 2025
edit post
India to approve deals worth .7b for Israeli defense missiles

India to approve deals worth $3.7b for Israeli defense missiles

0
edit post
MSFT Earnings: Microsoft reports higher Q1 revenue and profit; results beat

MSFT Earnings: Microsoft reports higher Q1 revenue and profit; results beat

0
edit post
TAQA to sell 250MW lignite power plant to India’s MEIL Energy

TAQA to sell 250MW lignite power plant to India’s MEIL Energy

0
edit post
High Dividend 50: Cross Timbers Royalty Trust

High Dividend 50: Cross Timbers Royalty Trust

0
edit post
By All Means, Elect Mamdani and Watch His Socialist Laboratory at Work

By All Means, Elect Mamdani and Watch His Socialist Laboratory at Work

0
edit post
US to reduce tariffs on China to 47%

US to reduce tariffs on China to 47%

0
edit post
India to approve deals worth .7b for Israeli defense missiles

India to approve deals worth $3.7b for Israeli defense missiles

October 30, 2025
edit post
TAQA to sell 250MW lignite power plant to India’s MEIL Energy

TAQA to sell 250MW lignite power plant to India’s MEIL Energy

October 30, 2025
edit post
By All Means, Elect Mamdani and Watch His Socialist Laboratory at Work

By All Means, Elect Mamdani and Watch His Socialist Laboratory at Work

October 30, 2025
edit post
The Best New Skills to Learn to Future-Proof Your Career

The Best New Skills to Learn to Future-Proof Your Career

October 30, 2025
edit post
How Millions of Retirees Get Honest Answers to Medicare Questions — for Free

How Millions of Retirees Get Honest Answers to Medicare Questions — for Free

October 30, 2025
edit post
High Dividend 50: Cross Timbers Royalty Trust

High Dividend 50: Cross Timbers Royalty Trust

October 30, 2025
The Adviser Magazine

The first and only national digital and print magazine that connects individuals, families, and businesses to Fee-Only financial advisers, accountants, attorneys and college guidance counselors.

CATEGORIES

  • 401k Plans
  • Business
  • College
  • Cryptocurrency
  • Economy
  • Estate Plans
  • Financial Planning
  • Investing
  • IRS & Taxes
  • Legal
  • Market Analysis
  • Markets
  • Medicare
  • Money
  • Personal Finance
  • Social Security
  • Startups
  • Stock Market
  • Trading

LATEST UPDATES

  • India to approve deals worth $3.7b for Israeli defense missiles
  • TAQA to sell 250MW lignite power plant to India’s MEIL Energy
  • By All Means, Elect Mamdani and Watch His Socialist Laboratory at Work
  • Our Great Privacy Policy
  • Terms of Use, Legal Notices & Disclosures
  • Contact us
  • About Us

© Copyright 2024 All Rights Reserved
See articles for original source and related links to external sites.

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In
No Result
View All Result
  • Home
  • Financial Planning
    • Financial Planning
    • Personal Finance
  • Market Research
    • Business
    • Investing
    • Money
    • Economy
    • Markets
    • Stocks
    • Trading
  • 401k Plans
  • College
  • IRS & Taxes
  • Estate Plans
  • Social Security
  • Medicare
  • Legal

© Copyright 2024 All Rights Reserved
See articles for original source and related links to external sites.