"We still think rates are on a gradual path downward. But with every cut we make, how much further we go becomes a closer call."
"Lower interest rates will be welcome news for many families - but rates are being cut despite inflation remaining well above target, thanks to rising unemployment and low growth under Labour. This decision reflects growing concerns about the weakness of our economy. Labour's choices have left us with the highest inflation in the G7, while the latest figures showed the economy shrinking and unemployment back to pandemic levels. The economic mismanagement of Rachel Reeves has left the Bank of England with an impossible dilemma, balancing high inflation against a fragile economy. Only the Conservatives have a leader with a backbone, a clear plan and a strong team to deliver a stronger economy."
"Today's cut doesn't change the BoE's dilemma. With real wages still racing ahead of productivity, underlying price pressure is not tamed, curbing room for more easing. We see scope for just one more cut before spring 2026."
The Bank of England cut the base interest rate from 4% to 3.75%. The Bank expects zero growth in the final quarter and described the economy as 'lacklustre'. Governor Andrew Bailey indicated that rates remain on a gradual path downward but said each additional cut makes it a closer call how far rates will fall. Political figures linked the rate cut to rising unemployment, low growth and high inflation, criticizing economic management. An economist at S&P Global Ratings warned that underlying price pressures persist and suggested scope for only one further cut before spring 2026. Budget measures include frozen rail fares and prescription charges and further support for families.
Read at London Business News | Londonlovesbusiness.com
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