The Bank of England decided, by a majority vote of 7-2, to cut interest rates by a quarter point in its meeting moments ago to reach 4.50%, as expected in its first meeting of the year, while two members preferred to cut interest rates by 50 basis points to 4.25%.

The interest rate report issued by the bank stated that there has been significant progress in combating inflation over the past two years, as the inflation indicator represented by the annual consumer price index reached 2.5% in the fourth quarter of last year, and it is expected to reach 3.7% in the third quarter of this year due to high global energy costs, even with expectations of a decline in local inflationary pressures, while growth was weaker than expected in the November monetary policy report, and it is expected to recover in the middle of this year.

Given the Committee’s evolving view of the medium-term outlook for inflation, a gradual and cautious approach to further tightening of monetary policy is appropriate. The Committee will continue to monitor the risks of persistent inflation until the risks of a return to the 2 percent target in the medium term have dissipated. The Committee will decide on the appropriate degree of tightening of monetary policy at each meeting.