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3mo ago

Bank of England Cuts Interest Rate to 4.25% Following Tight Vote Split

The Monetary Policy Committee's 5-4 decision reflects concerns over global trade tariffs and easing inflation, with further rate cuts anticipated.

People sit on the benches outside the Bank of England in the financial district known as The City, in London, Wednesday, April 9, 2025. (AP Photo/Alberto Pezzali)
View of the Bank of England and the Royal Exchange from the Lookout viewing point, in London, Wednesday, April 9, 2025. (AP Photo/Alberto Pezzali)
People walk outside the Bank of England building in London, Britain, May 8, 2025. REUTERS/Carlos Jasso/File photo

Overview

  • The Bank of England reduced its base interest rate from 4.5% to 4.25% on May 8, 2025, marking the fourth cut since August 2024.
  • The Monetary Policy Committee was divided, with five members supporting the 0.25% cut, two favoring a larger 0.5% cut, and two voting to maintain the rate at 4.5%.
  • The decision was influenced by Donald Trump's global trade tariffs, which are expected to dampen UK economic growth and inflation.
  • Nationwide announced interest rate reductions on 63 savings products effective June 1, and experts urge savers to secure higher rates before further declines.
  • Economists predict additional rate cuts in 2025, potentially lowering the base rate to around 2.75% by early 2026.