Overview

• The Bank’s base rate was cut by 25 basis points to 4%, the lowest level since March 2023, after a 5-4 Monetary Policy Committee vote that required a second ballot
• Four MPC members dissented by voting to hold rates unchanged due to concerns about persistent inflation running above the 2% target
• The BoE now forecasts consumer price growth peaking at 4% in September before easing back toward its 2% goal next year
• Unemployment climbed to 4.7% in the three months to May, its highest rate in four years and a key factor driving calls for looser policy
• The cut will lower monthly payments for roughly 600,000 tracker mortgage holders but is likely to compress savers’ returns and raises doubts about the timing of further reductions