Bank of England Cuts Interest Rates to 5%

The Bank of England has cut interest rates for the first time since March 2020, lowering them from 5.25% to 5%, in response to easing inflationary pressures. The decision was made by a narrow majority of 5-4 in the Monetary Policy Committee, highlighting a cautious approach to future rate changes. Governor Andrew Bailey emphasized the need for careful management of rates to avoid undermining inflation control. Market reactions included a depreciation of the pound and increased speculation about further cuts by December. This rate reduction is seen as a potential boost for borrowers and the economy, particularly benefiting the property and automotive sectors. Analysts believe that while the cut offers relief, borrowing costs remain high and flexibility will be crucial for market recovery.