The Bank of England has decreased its base rate to 4.5%, marking the third cut in six months, reflecting concerns about the UK's economy. With inflation predicted to rise temporarily to approximately 3.7% this summer due to rising energy costs and other factors, the bank still projects a narrow avoidance of recession as GDP Growth is expected to turn positive by early 2025. Governor Andrew Bailey emphasized a cautious approach towards future rate cuts, highlighting that wage growth could influence inflation and subsequent monetary policy decisions.
The Bank of England has reduced its base rate to 4.5 per cent - the third such cut in six months - as policymakers seek to shore up Britain's weakening economy.
Despite that near-term inflation bump, the Bank's latest forecasts suggest the UK will narrowly avoid a technical recession as GDP inches back into positive territory in early 2025.
A key factor influencing future rate decisions could be wage growth, which some policymakers fear could reignite inflation if it outpaces productivity.
Governor Andrew Bailey called the move "welcome news" for borrowers, while stressing that the Bank will continue to strike a "gradual and careful approach" to any further cuts.
Collection
[
|
...
]