Bank of England Cuts Rates Amid Inflation Concerns

The Bank of England (BoE) announced a quarter-point interest rate cut to 4.75%, its second reduction since August, due to a faster-than-expected drop in inflation. Governor Andrew Bailey indicated that while future cuts might be gradual, the pace could increase if inflation continues to fall. The recent budget by the new government, led by Rachel Reeves, has increased spending, potentially impacting inflation and delaying the BoE's ability to reach its 2% inflation target. Meanwhile, the markets are adjusting their expectations for future rate cuts, factoring in both the budget's impact and the potential global economic repercussions of Donald Trump's election victory and proposed tariffs. Economists are predicting further cuts, but the path remains uncertain due to these fiscal and geopolitical developments.