Bank of England Cuts Interest Rate to 4.75%

The Bank of England has cut interest rates to 4.75% for the second time in 2024, responding to lower-than-expected inflation rates, which fell to 1.7%, below the 2% target. This decision is expected to ease financial pressure on borrowers and mortgage holders, although future cuts may be gradual due to anticipated inflation increases from the recent budget announced by Finance Minister Rachel Reeves. The budget is projected to boost economic growth by 0.75% but could add up to half a percentage point to inflation over the next two years. Despite the cut, BoE Governor Andrew Bailey emphasized the need for caution to maintain inflation close to the target level. Analysts suggest that the pace of future rate cuts might slow, influenced by the government's fiscal measures and a recent U.S. election outcome.