Bank of England Resumes Monetary Easing by Cutting Key Rate to 4.5%

The Bank of England has reduced its main interest rate by a quarter of a percentage point to 4.50%, the lowest level since mid-2023, as announced by the bank in a statement on Thursday. Despite inflation persisting slightly above the 2.5% target, most economists had expected this rate cut, based on the analysis by the Monetary Policy Committee. Treasury Chief Rachel Reeves indicated that the Labour Government, led by Prime Minister Keir Starmer, is focusing on economic growth to enhance living standards and boost funding for public services. Bank Governor Andrew Bailey stated that the Bank will vigilantly monitor the U.K. economy and adopt a cautious stance towards further rate reductions.