The Bank of England voted 5-4 to cut interest rates by 25 basis points to 4.25%, as expected, at its meeting just moments ago. Two members favored a 50 basis point cut, and two members preferred to keep rates unchanged at 4.50%.
The Bank’s interest rate report stated that inflation remained generally low, with the consumer price index reaching 2.6% in March, compared to 2.8% in February, a level close to the February report’s forecast. Despite continued rising wage growth indicators, inflation is still expected to slow markedly for the remainder of the year.
The Bank expects UK GDP growth to slow amid increased uncertainty surrounding global trade. The Committee remains focused on returning inflation to the target level. The Committee will continue to closely monitor inflation risks. Monetary policy will need to remain tight for a sufficient period to dissipate the risks of a sustained return to the 2% target over the medium term. The Committee will decide on the appropriate degree of policy tightening at each meeting.