The Bank of England has lowered interest rates from 4.75% to 4.5%, suggesting possible future cuts this year as the UK economy is facing challenges. The bank has revised its growth forecasts downward, narrowly avoiding a recession. Governor Andrew Bailey emphasized the commitment to maintain low and stable inflation as essential for a healthy economy. Economic adviser Joe Nellis noted that the decision, influenced by the sluggish economy, reflects a balance between fostering growth and managing inflation concerns, especially given rising global uncertainties and domestic factors.
It will be welcome news that we have been able to cut interest rates again today. We'll be monitoring the UK economy and global developments very closely.
The Bank of England's decision to cut interest rates to 4.5% comes in response to the ongoing weakness of the flatlining UK economy.
The caution of the BoE reflects the awareness of policymakers that the inflationary landscape may not be as rosy as it was when it set out on its rate-cutting programme.
This brings UK interest rates down by 0.75% from its peak of 5.25%, in line with the US but comfortably above the Eurozone's rate of 2.75%.
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