Bank of England Cuts Interest Rates to 4.5% to Support UK Economy

The central bank's first rate cut of 2025 aims to stimulate growth as inflation eases but challenges persist.

The Bank of England reduced its base interest rate by 0.25 percentage points to 4.5%, marking the third cut in six months.
The decision, supported by seven of nine Monetary Policy Committee members, reflects concerns over slow economic growth and subdued consumer spending.
While inflation has fallen to 2.5%, it is projected to rise later in 2025 due to energy price increases and regulatory changes, delaying a return to the 2% target until 2027.
The rate cut is expected to lower mortgage costs for some borrowers, though fixed-rate mortgage holders will only see changes upon renewal.
Savings rates may decline further, and experts suggest locking in higher rates now, while the Bank signals additional rate cuts are likely this year.