The Bank of England has cut interest rates by 25 basis points, marking the first reduction in four years and signaling a potential turning point for the UK economy. This decision has led to a rally in the FTSE 100 and may stimulate sectors like retail and property that have been under pressure from high rates. Experts caution that while this cut is a victory against inflation, underlying pressures remain, with predictions of inflation creeping back towards 3% by year-end due to factors like rising energy prices and potential global inflation from the US. The cut is expected to provide some relief to homeowners and businesses, but the economic growth forecast remains modest at 0.8% for the coming year. Markets are anticipating further rate cuts, but analysts advise against complacency as the overall economic landscape remains fragile. The Bank's decision reflects ongoing concerns about balancing inflation control with economic recovery.